S&P/TSX Composite Index

TSX Down 230 Points at Midday With Info Tech, Industrials, The Worst Performers

The Toronto Stock Exchange is down near 230 points at midday, with most sectors lower, led by info tech (-2.0%) and industrials (-1.8%).Energy (+1.9%) is the top performer, boosted by higher oil prices.The Bank of Canada held its key benchmark interest rate steady at 2.25%. Avery Shenfeld, chief economist at CIBC Capital Markets, said the decision to leave the policy rate at 2.25% came as no surprise given the clouded outlook ahead.Shenfeld noted the Bank assumed that oil prices will gradually decline to US$75/bbl in mid-2027, "still lifting near term inflation but leaving the growth outlook little changed from the prior forecast, one that only makes very gradual progress in eliminating economic slack". While the BoC sees "little evidence" of a spillover to core inflation so far,", it said that it will not let "higher energy prices become persistent inflation".Shenfield said, "If that sounds hawkish, its worth noting that the Bank doesn't see that happening, projecting a spike to 3% inflation but a return to the 2% target early next year, a view we share, and while it says it might need to adjust the policy rate, those changes "can be expected to be small."In stocks, CGI (GIB-A.TO) is down near 14% after it reported its second-quarter results this morning.CN Rail (CNR.TO) is 6.1% lower after reporting inline first-quarter results.

Brief: Bank of Canada Governor's Press Conference Ends

Brief: Bank of Canada's Governor Says Businesses Today Are More Cautious Than Post-COVID About Passing Along Higher Costs to Their Clients

Brief: Bank of Canada's Rogers Says If There's A "Big" Change in CUSMA Review, Then That Could Be A "Shock" to Economy

Brief: Bank of Canada's Senior Deputy Governor Rogers Says Short-Term Threats From Inflation; in Longer-Term Are Trade Tensions With The U.S.

Brief: Bank of Canada's Governor Says There Is "No Set Timeline" on Possible Rate Hikes; Depends on Conditions, What It Sees

Brief: Bank of Canada's Governor Says If Need of Rate Hike Then Probably More Than One Consecutive Rate Decisions

Brief: Bank of Canada's Governor Says May Need to Raise Rates If Energy Prices Rise Further, or Stay High Longer, to Keep Inflation Within Target

Brief: Bank of Canada Governor Macklem's Press Conference on Policy Decision, MPR Starts

Bank of Canada Lifts Slightly GDP Growth Forecasts for This Year, 2027, as Exports, Business Investment Gradually Pick Up

The Bank of Canada on Wednesday said it slightly lifts its growth forecast for the economy to 1.2% this year, rising to 1.6% in 2027, slightly above potential output growth as exports and business investment gradually pick up.The gross domestic product is projected to expand by 1.7% in 2028, writes the central bank in its quarterly Monetary Policy Report (MPR).The previous MPR in January saw GDP growth at 1.1% this year. It didn't give a 2028 forecast.Economic growth in Canada has been broadly consistent with the outlook in the January MPR, added the BoC. Consumer and government spending are supporting GDP, while United States tariffs and related trade uncertainty are weighing on exports and investment. Inflation had been slowing as expected before the oil price shock occurred.The war in the Middle East is already affecting the economy, according to Canada's central bank. The immediate impact has been higher gasoline prices, pushing up the consumer price index to 2.4% year over year in March.The outlook is highly conditional on key assumptions, including that U.S. tariffs remain unchanged and that oil prices gradually decline from US$90 in Q2 to US$75 per barrel by mid-2027.Inflation is expected to peak in April at about 3% and then return to the 2% target in early 2027, assuming that global oil prices decline as expected, stated Wednesday's MPR. In 2027 and 2028, slack in the economy weighs on prices and largely offsets higher costs, keeping inflation close to the 2% target.

Bank of Canada Maintains Key Interest Rate at 2.25%

The Bank of Canada held its key interest rate at 2.25% on Wednesday, due to "heightened volatility" caused by the Middle East conflict and U.S. trade policy reshaping global trade patterns. "Both are ongoing sources of uncertainty," it said.The Bank said Governing Council is looking through the war's immediate impact on inflation but will not let higher energy prices become persistent inflation. "As the outlook evolves, we stand ready to respond as needed. The Bank is committed to maintaining Canadians' confidence in price stability through this period of global upheaval," it added.The economic growth outlook for Canada is unchanged from the January monetary policy report projections, the BoC's statement said.The statement added: "After a contraction in the fourth quarter of 2025, growth is forecast to have resumed in early 2026. Consumer and government spending are supporting economic activity, while tariffs and trade uncertainty are weighing on exports and business investment. Housing activity declined in the fourth quarter and is being held back by slow population growth, economic uncertainty and ongoing affordability issues. The labour market is soft, with subdued employment growth over the past year and job losses in sectors targeted by US tariffs. The unemployment rate remains in the 6.5% to 7% range, reflecting both weak hiring and fewer job seekers."The Bank's April forecast projects GDP growth of 1.2% in 2026, rising to 1.6% in 2027 and 1.7% in 2028 as growth in exports and business investment resumes along a lower trajectory. With GDP growing slightly above potential, the current excess supply in the economy is gradually absorbed. While the war in Iran may alter its composition, overall GDP growth is little changed in the updated forecast: Since Canada is a large net exporter of oil, higher oil prices increase national income even as consumers are squeezed by higher gasoline prices."CPI inflation climbed to 2.4% in March because of sharply higher gasoline prices. The March increase follows several months of slowing inflation data. Core inflation has been easing and held steady at just above 2% in the most recent inflation report. The proportion of components of the CPI basket rising above 3% has also declined in recent months. As expected, so far there is little evidence that oil prices have fed through more broadly to goods and services prices, but this warrants close attention in the months ahead. Near-term inflation expectations have moved up with higher gasoline prices and still-elevated food price inflation, but longer-term inflation expectations have remained anchored."CPI inflation will likely rise further in April to about 3%. Based on the assumption that oil prices will ease, inflation is forecast to come down to the 2% target early next year and remain around 2% over the projection horizon."Against this backdrop and taking into account the current projection, Governing Council decided to maintain the policy rate at 2.25%.

That Is Based On Risk of Higher Energy Prices Becoming "Ongoing Generalized Inflation Increases", Adds BoC's MPR Press Conference Opening Statement

Bank of Canada Says "There May Be a Need For Consecutive Increases in the Policy Rate", Says MPR Press Conference Opening Statement

That Is If the United States Imposes "Significant" New Trade Restrictions on Canada, Adds MPR Press Conference Opening Statement

Bank of Canada "May Need To Cut the Policy Rate Further To Support Economic Growth", Says MPR Press Conference Opening Statement

Brief: Bank of Canada's April MPR Says Outlook Depends on Outcome of CUSMA Trade Negotiations With U.S., Duration and Severity of Iran War

CAD Down 0.13 at 72.95 Vs USD

Brief: Bank of Canada's April MPR Sees Q1 GDP Growth at 1.5%

BoC's April Forecast Projects GDP Growth of 1.2% in 2026, Rising to 1.6% in 2027 and 1.7% in 2028

BMO's Earl Davis on BNN TV Now Sees BoC Rates On Hold For 2026, Previously Saw One As Possible, Based on BoC's GDP Growth Forecasts