By Ketki Saxena
Investing.com -- After last week’s brutal selloff, the TSX and Wall Street opened in the green this morning as positive earnings from BofA set the tone for risk-sentiment. So far, higher rates have boosted interest incomes for lenders in the third quarter, although turbulent markets have put a hamper on deals, and banks continue to increase provisions for credit loss to brace for a downturn.
Equities were also supported by a pullback in the benchmark U.S. 10-year bond yields, which retreated from multi-year highs.
The commodity-heavy Canadian index was also supported by gains in crude as several OPEC+ members over the weekend expressed support for the bloc’s 2 million bpd production cut, reiterating the need to support oil prices amid headwinds from slowing growth.
The Biggest Stories on Bay Street
RBC (TSX:RY) is selling part of its investor services unit to CACEIS, the asset servicing division of French Bank Credit Agricole (EPA:CAGR). The sale of RBC’s European asset servicing business is due to be completed by the end of the third quarter in 2023. The deal would result in CACEIS having about €4.8 trillion ($4.7-trillion) worth of assets under custody and €3.5 trillion of assets under administration, CACEIS said.
Loblaw announced a price freeze to over 1500 of its No Name brand food products starting next week and until the end of January 2023, as it seeks to protect consumers from soaring food prices. The company blamed “increased suppliers’ costs due to fuel, labour, weather and global conflict,” for the rapid rise in grocery prices, which has been passed to retailers.” Loblaw and its peers have been facing accusations of price-gouging most notably by federal NDP Leader Jagmeet Singh.
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In Canadian Economics
The Bank of Canada’s Business Outlook Survey and Survey of Consumer Expectations for Q3 revealed that business confidence has softened. The report notes, “Firms expect slower sales growth as interest rates rise and demand growth shifts closer to pre-pandemic levels. Early signs suggest that pressures on prices and wages have started to ease, but firms’ inflation expectations remain high.
The Bank of Canada's Survey of Consumer Expectations (CSCE) meanwhile showed that 50% of Canadians are cutting back on spending, while 78% see more than a 50% probability of a recession.