Everything You Need to Know on Monday: Bank of Canada Widely Expected to Make Jumbo Rate Cut on Wednesday

Good morning mooers! Here are things you need to know about today's market:

● S&P/TSX 60 Index Standard Futures are trading at 1,488.00, down 0.11% from previous close

● With inflation below target, BoC expected to deliver supersized rate cut this week

● Canadian Crude Goes to Alaska as New Pipeline Shakes Up Exports

● Six months on, what has the Trans Mountain pipeline project achieved and what's next?

Today, the Canadian dollar is trading at 72.36 US cents, a slight decrease from the previous close.

Forecasters expect the Bank of Canada to speed up the pace of interest rate cuts and lower its policy rate by half a percentage point this week.

The central bank’s interest rate announcement on Wednesday comes after Statistics Canada reported the annual inflation rate in September tumbled to 1.6 per cent — below the Bank of Canada’s two per cent inflation target.

Nathan Janzen, an assistant chief economist at RBC, said the latest consumer price index report reinforced his expectation for a supersized rate cut.

“(You) have an economy that’s probably performing worse than necessary to get inflation under control and still interest rates (are) at restrictive territory. So that makes it a pretty straightforward argument to continue cutting interest rates,” Janzen said, adding that the central bank needs to lower interest rates to a level that doesn’t hinder economic growth.

After the Bank of Canada’s interest rate cut last month, governor Tiff Macklem signalled that the central bank will be ready to cut rates more aggressively if inflation falls by too much.

A tanker of Canadian crude was shipped from Vancouver to Alaska for the first time in at least 10 years as the recently expanded Trans Mountain pipeline opens up new export opportunities.

The cargo of 466,000 barrels of oil left on a tanker from Vancouver on Oct. 1 and arrived 10 days later in Nikisi, Alaska, according to the Vortexa tanker-tracking service. That’s the first such shipment in US Customs data stretching back to 2014. The cargo went to the Marathon Kenai refinery, Vortexa analyst Rohit Rathod said in an email.

The expanded Trans Mountain pipeline — which carries crude from Canada’s oil sands to a port near Vancouver — began operation earlier this year, bringing the line’s capacity up to almost 900,000 barrels a day and increasing exports to refineries on the US West Coast and in Asia. Tankers have since left Vancouver for China, South Korea, Brunei and India, among other locations.

Most of the crude that’s gone from Vancouver to the US travels south to California or Washington State. The shipment to Alaska, a major oil-producing state in the US, is unusual not just because it originated from Canada. Only five international tanker shipments of crude have gone to Nikisi in the past four years, including two from Argentina this year and two from Russia in 2021.

Nearly six months after its opening, the Trans Mountain pipeline expansion is boosting Canada's energy sector as promised.

By a variety of measures, the expensive and contentious pipeline project is bearing fruit as more Canadian oil reaches the West Coast to be shipped to export markets.

The Trans Mountain pipeline carries crude oil from Alberta to the B.C. coast. Its expansion, which opened May 1, tripled the capacity of the existing pipeline, adding an additional 590,000 barrels per day of shipping capability.

That's massive for an industry that has long been pipeline-constrained — the Trans Mountain pipeline expansion accounts for 17 per cent of the total pipeline export capacity available to Canadian crude oil shippers, according to the Canada Energy Regulator.

Its construction was a lengthy, costly process. But now that it is completed, Canadian oil production is smashing records, and economists say Trans Mountain will provide a lift to the GDP of both the province of Alberta and Canada as a whole this year.