By James Langton
(May 17 – 09:00 ET) – The Bank of Canada is expected to raise rates 50 basis points in line with the U.S. Federal Reserve’s move yesterday. An announcement should be out this morning. The Royal Bank has already increased its prime lending rate by 50 bps to 7.5% from 7%. It will take effect tomorrow, May 18.
In the meantime, Statistics Canada is reporting that wholesale sales rebounded in March with $31.6 million in goods sales. That’s up 2.0% from February. It was the largest monthly percentage increase since October 1998 and double expectations, solidify rate hike expectations.
In Europe, stocks are sliding in the wake of the move. The euro’s renewed weakness isn’t helping. Telecoms are down on Deutsche Telecom’s announcement that profit will suffer this year. London’s FTSE is down 99 points to 6219. In France the CAC 40 has dropped 75 points to 6482. Germany’s DAX is down 112 points to 7258.
Granada Group PLC and Compass Group PLC have agreed to merge, with Granada spinning off its media division to focus on catering. Terra Networks is also sliding in the wake of its deal with Lycos.
In Asia, stocks slid, too, after the rate move in the U.S. The Nikkei dropped 147 points to 17404. The Hang Seng closed down 332 points to 14827.
In other business news TD Waterhouse Group Inc. earned 20¢US per diluted share, in the second quarter ended April 30, up from 9¢ per share in the quarter last year. Analysts called for 19¢ a share.