The Daily Chase: Markets see half-point Bank of Canada hike; Oil slumps on Shanghai lockdown

The market is now pricing in a half-point hike by the Bank of Canada at its next rate decision, according to data tracked by Bloomberg.

The market is now pricing in a half-point hike by the Bank of Canada at its next rate decision, according to data tracked by Bloomberg. As recently as Friday, only a quarter-point move on April 13 was being baked in. Perhaps one of the triggers for traders’ conviction was the speech by Bank of Canada Deputy Governor Sharon Kozicki on Friday, in which she said the bank is “prepared to act forcefully” to rein in inflation. We’ll chase opinions on the arguments for and against a half-point move, and what it means for housing and personal finances more broadly. We’ll point out here that the Canadian dollar has been little changed this morning after moving above US$0.80 on Friday for the first time since January.

OIL SLUMPS

The price of West Texas Intermediate crude has been down close to five per cent this morning as supply and demand dynamics work against the commodity. On the demand front, a two-phase lockdown of Shanghai is another reminder that COVID-19 isn’t behind us. On the supply side, our Bloomberg News partners pointed out last night that Asia-bound exports of Russian oil rose last month.

On a more micro level: there’s a nearly half-billion-dollar deal in Canada’s energy sector this morning. Vermilion Energy is buying Leucrotta Exploration for $477 million in a Western Canada expansion. Vermilion noted in a release that it’s still on track to hit its $1.2-billion net debt target in the second half of the year.

APPLE IN THE SPOTLIGHT ON TWO FRONTS

Will Smith’s on-stage slap of Chris Rock is overshadowing the awards, which included a first as Apple’s Coda won Best Picture. And even that recognition is getting overshadowed in the market this morning by a Nikkei report that Apple is planning to slash production of its iPhone SE 20 per cent in the next quarter.