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Fed decision day, and TMX gets final OK to open



In the United States, all eyes are on the U.S. Federal Reserve as it prepares to unveil its latest policy decision at 2 p.m. ET. While no change to the benchmark interest rate is anticipated, analysts and investors will be closely parsing the Fed's statement and subsequent press conference for insights into its future course. Despite previous expectations of multiple rate cuts, the unexpectedly robust performance of the U.S. economy has tempered such forecasts. As of now, the swaps market is pricing in just one cut for the remainder of the year, likely toward the end of 2024.


Simultaneously, a significant development unfolds in Canada as the Trans Mountain Pipeline Expansion (TMX) receives final approval from the country's Energy Regulator to commence operations. This green light removes the last regulatory hurdle for the project, marking a significant milestone for Canada's oil sector. The expansion, plagued by delays and cost overruns, will nearly double the capacity for transporting crude from Alberta to British Columbia's export terminals. Beyond the anticipated access to Asian markets, unexpected demand from U.S. Pacific Coast refineries is anticipated to help alleviate the discount on Canadian heavy crude.


In the financial realm, Viking Holdings Ltd., a cruise line operator, prepares to go public on the New York Stock Exchange (NYSE) after successfully pricing its IPO near the top end of the range. With strong investor interest, the IPO is expected to raise $1.54 billion, making it the second-largest offering in the U.S. this year. Notably, the Canada Pension Plan Investment Board holds a stake in Viking, further underscoring the Canadian connection.


On the banking front, Toronto-Dominion Bank discloses an initial provision of US$450 million related to a U.S. probe into its anti-money laundering practices. The bank acknowledges deficiencies in its monitoring and detection capabilities, with analysts speculating the ultimate cost could exceed $1 billion.


In domestic retail, Loblaw Cos. Ltd. reports robust earnings, prompting a 15% increase in its quarterly dividend payout on the back of increased revenue and profit. The company's strong performance, fueled by growth in same-store sales, reflects resilience amid broader economic trends.


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