Canadian banks announced they were raising their prime lending rates after the Bank of Canada surprised markets by hiking it benchmark interest rate on June 7.
Business
GO bus service suspended as operators, station attendants, and other workers walk off the job
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GO bus service has been suspended as roughly 2,200 bus operators, station attendants, and other employees are on strike.
The job action began at 12:01 a.m. today.
Despite the labour disruption, trains will remain operational and stations are open.
Contracts talks have been underway since last April between the Amalgamated Transit Union (ATU) Local 1587 and Metrolinx, the provincial agency that manages and integrates road and public transportation in the Greater Toronto and Golden Horseshoe areas. The union members have been without a contract since June 1.
In a statement issued late last night, ATU Local 1587 said it was unable to secure a deal with the employer.
Contract talks broke down over safety concerns, specifically related to hiring contract workers from outside companies, ATU Local 1587 president Rob Cormier said
“Negotiations have failed because Metrolinx failed to come to the table with a reasonable offer to address any of our key issues,” he said in the statement.
“Protections against contracting out are imperative to ensure that experienced workers are on the job running GO Transit safely and efficiently. Without these protections, Metrolinx can contract to outside companies which will hire inexperienced workers in precarious, non-union positions.”
Metrolinx, meanwhile, said the union walked away from weekend talks and has refused to return to the bargaining table today.
Company spokesperson Anne Marie Aikins, in a statement, said she was hopeful both sides would come to an agreement after they offered 67 contract “enhancements.”
She said Metrolinx appreciates that the union is concerned about safety and job security, but said they have put steps in place to address those concerns.
“For 22 years, we have had language in the agreement that protects the employment security of our ATU employees,” said Aikins, adding Metroolinx remains “open to discussing ways forward” with the union.
“This long-standing protection will continue to protect existing staff as well as new hires joining Metrolinx.”
GO bus passengers are being advised to plan ahead and leave extra early.
Commuters can get the latest updates on the job action by visiting GO Transit web site and social media accounts.
The union will be holding a press briefing on the GO Transit strike on Monday at 9 a.m. at Maple Leaf Square.
The GO Transit strike comes just three days after 55,000 education workers in Ontario began job action after their union, the Canadian Union of Public Employees, failed to reach a contract agreement with the provincial government.
With files from The Canadian Press.
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The company says director Chika Stacy Oriuwa indicated she resigned “because of her loss of confidence in board leadership and because of mistreatment.”
In addition to Oriuwa, Indigo says Frank Clegg, Howard Grosfield and Anne Marie O’Donovan have also stepped down as directors. No explanation for their departures was given.
6:05
Indigo CEO Heather Reisman talks about creating a happier planet in her new book ‘Imagine It!’
Indigo wished the departing directors well and thanked them for their contributions.
The retailer says Reisman will retire as executive chair and from the board effective Aug. 22.
Reisman stepped down as chief executive of Indigo last year as part a transition that saw Peter Ruis, who had been the retailer’s president, promoted to chief executive.
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Big banks follow suit after surprise quarter-point hike
Royal Bank of Canada, TD Canada Trust, Canadian Imperial Bank of Commerce (CIBC), Bank of Montreal, National Bank of Canada and Bank of Nova Scotia all said they were increasing the prime rate by 25 basis points to 6.95 per cent from 6.70 per cent, effective June 8, 2023.
Desjardins Group and Equitable Bank also announced it would raise its Canadian prime rate by the same amount.
The Bank of Canada surprised markets and observers when it raised its benchmark policy rate by a quarter percentage point to 4.75 per cent earlier in the day.
The central bank has raised its rate nine times, and 4.5 percentage points, since March 2022, and the commercial banks’ prime rate has moved in lockstep from 2.7 per cent to 6.95 per cent.
Listen to Down to Business for in-depth discussions and insights into the latest in Canadian business, available wherever you get your podcasts. Check out the latest episode below:
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Last Updated 4:00 PM EST
Stock indices finished today’s trading session mixed. The Nasdaq 100 (NDX) and the S&P 500 (SPX) fell 1.75% and 0.38%, respectively. Meanwhile, Dow Jones Industrial Average (DJIA) gained 0.28%.
Furthermore, the U.S. 10-Year Treasury yield increased to 3.79%, an increase of more than 12 basis points. Similarly, the Two-Year Treasury yield also increased, as it hovers around 4.56%.
The Atlanta Federal Reserve updated its latest GDPNow reading, which allows it to estimate GDP growth in real-time. The “nowcast” becomes more accurate as more economic data is released throughout the quarter. Currently, it estimates that the economy will expand by about 2.2% in the second quarter.
This is higher than its previous estimate of 2%, which can be attributed to recent releases from the U.S. Census Bureau, the Institute for Supply Management, and the U.S. Bureau of Labor Statistics.
Last updated: 1:50PM EST
Stocks are mixed so far in today’s trading session. As of 1:50 p.m. EST, the Nasdaq 100 (NDX) and the S&P 500 (SPX) are down 1.5% and 0.4%, respectively. Meanwhile, Dow Jones Industrial Average (DJIA) is up 0.2%.
Surprising market observers, the Bank of Canada hiked its primary policy rate by 25 basis points, raising it to 4.75% on Wednesday. The bank cited persistent underlying inflation as the main driver for this decision, marking a departure from two consecutive meetings where the rate was held steady.
The bank also continues with its policy of quantitative tightening, indicating a response to worldwide economic growth that’s weakening due to increased interest rates. “Major central banks are signaling that interest rates may have to rise further to restore price stability,” the bank stated.
This unexpected move initially boosted the Canadian dollar but has since lost some ground as it hovers around C$1.338 per US$1. The rate increase follows a rise in CPI inflation to 4.4% in April, its first surge in 10 months, and a stronger-than-anticipated GDP of 3.1% in Q1.
The Bank of Canada’s Governing Council asserts that the rate hike is in response to previous policy not being restrictive enough to balance supply and demand and bring inflation sustainably back to the 2% target.
As a major trading partner, what happens in Canada usually has ripple effects in the U.S. Thus, this could be a sign that the Federal Reserve might have to continue hiking as well going forward.
Last updated: 10:55AM EST
Stocks have turned red so far in today’s trading session after a positive start. As of 10:55 a.m. EST, the Nasdaq 100 (NDX) and the S&P 500 (SPX) are down 0.9% and 0.2%, respectively. Meanwhile, Dow Jones Industrial Average (DJIA) is near the flatline.
Last updated: 9:50AM EST
Stocks ticked higher at open on Wednesday morning even as the trade deficit data showed that the United States’ trade deficit jumped 23% in April to $74.6 billion – a six-month high indicating a surge in imports. Imports were up 1.5% in April to $323.6 billion while exports fell by 3.6% to $249 billion.
The Nasdaq 100 (NDX), S&P 500 (SPX), and Dow Jones Industrial Average (DJIA) were all up by 0.6%, 0.32%, and 0.11%, respectively, at 9:50 a.m., EST, June 7.
First published: 4:38AM EST
U.S. Futures are in the red this morning after the SPX marked its highest close in trading since August 2022 yesterday. We are almost halfway through the trading week, and markets remain elevated in the absence of any negative news. Futures on the Nasdaq 100 (NDX), S&P 500 (SPX), and Dow Jones Industrial Average (DJIA) are down 0.26%, 0.15%, and 0.18%, respectively, at 4:00 a.m., EST, June 7.
On the economic front, traders await reports on the U.S. trade deficit and consumer credit due today, as well as the weekly initial jobless claims data scheduled for June 8. Meanwhile, the Chinese economy is showing signs of slowing, with May exports falling 7.5% year-over-year against the expected 0.4% decline. Also, imports fell 4.5% year-over-year, much lower than the expected 8% decline.
On the earnings front, fewer companies remain to report their quarterly results. Shares of Casey’s General Stores (NYSE:CASY) dropped 4.5% in extended trading yesterday, after missing both sales and earnings expectations. On the other hand, Dave & Buster’s (NASDAQ:PLAY) stock was up over 4% in yesterday’s extended trade following its report of mixed results, with earnings surpassing but sales missing estimates.
Furthermore, meme stock GameStop (NYSE:GME), travel service provider Trip.com Group (NASDAQ:TCOM), e-commerce platform Rent the Runway (NASDAQ:RENT), and discount chain Ollie’s Bargain Outlet (NASDAQ:OLLI) will report their results today.
Elsewhere, European indices are trading in the red today, following weaker-than-expected data from German industrial production for April. After a disastrous March, April seems to continue bleeding from poor performance. Industrial production in April grew by a marginal 0.3% month-over-month, against an expected rise of 0.7%. Economists worry that if data remains weak in May and June, the economy’s recession will spill well into the second quarter.
Asia-Pacific Markets Trade Mixed on Wednesday
Asia-Pacific indices ended the trading session mixed today, following economic data sets from different nations. Mainland Chinese and Hong Kong indices closed mixed on signs that the economy is going into a continued slowdown. At the same time, Australian indices continue their downward spiral after reporting poor GDP growth and following the Reserve Bank of Australia’s unexpected rate hike to a record high yesterday.
Hong Kong’s Hang Seng index and China’s Shanghai Composite ended the day up 0.80% and 0.08%, respectively, while the Shenzhen Component index closed down by 0.60%.
At the same time, Japan’s Nikkei and Topix indices ended down by 1.82% and 1.34%, respectively.
Interested in more economic insights? Tune in to our LIVE webinar.
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