Everything You Need to Know on Thursday: Biden Administration Wants Enbridge Pipeline Ruling Revisited

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

● S&P/TSX 60 Index Standard Futures are trading at 1,327.30, down 0.65%.

● Bank of Canada says June interest rate cut 'within the realm of possibilities'

● How will the Bank of Canada's interest rate decision impact real estate?

● US crude oil stocks post week-over-week build of nearly 6 million barrels, EIA reports

● Stocks to watch: Enbridge

Today, the Canadian dollar is trading at 73.03 cents US, a slight decrease from Wednesday.

The S&P/TSX 60 Index Standard Futures (SXF) are currently trading at 1,327.30, which is down 0.65% from the previous close.

The Bank of Canada held its benchmark interest rate steady at 5 per cent on Wednesday, and while it said that a June cut is "within the realm of possibilities" the central bank needs to see evidence that progress on inflation is sustained.

"Yes, it's within the realm of possibilities," Governor Tiff Macklem said when asked whether the door has been opened to a rate cut in June. He noted that inflation has come down, as has the central bank's closely monitored measures of core inflation, and that while some things such as shelter prices are still supporting inflation "things are moving in the right direction."

"We're encouraged by that progress," he said.

"We need to see that progress continue and if things move in line broadly with the outlook that we published today, we will be becoming more confident that we're clearly on the path to 2 per cent inflation and it will be appropriate to cut our interest rate."

US crude oil inventories gained 5.9 million barrels week over week to 457.3 million barrels in the week ended April 5, the US Energy Information Administration reported Wednesday.

Crude oil production remained unchanged at 13.100 million barrels per day, the EIA reported.

Crude oil imports edged higher by 0.24 million b/d week over week to 6.508 million b/d, while crude oil exports fell 0.11 million b/d to 3.948 million b/d.

US gasoline stocks also rose 0.7 million barrels week over week to 228.5 million barrels, according to the EIA.

Real estate experts say many potential homebuyers are waiting for rate cuts before entering the real estate market following the Bank of Canada’s latest decision to hold rates, but demand remains high for some properties.

Victor Tran, mortgage and real estate expert at Ratesdotca, said in a statement to BNNBloomberg.ca Wednesday that the housing market “continues to be in a holding pattern” characterized by tight supply and “stiff competition for desirable properties.”

“While some consumers are willing to take on higher interest rates now to avoid the expected frothy market when rates drop, others are tired of waiting for rate drops and are losing faith that rates will decline as far and as fast as previously predicted and are stepping back from the search,” Tran said.

Tran's comments come after the Bank of Canada elected to hold its policy rate at five per cent on Wednesday for the sixth consecutive meeting, while officials signalled rate cuts are near but more evidence is needed to show easing inflationary pressures. The hold was widely expected by economists tracked by Bloomberg.

The Biden administration has stepped into Enbridge Inc.’s fight over an oil pipeline in Wisconsin, arguing an earlier ruling did not consider the impact on U.S. policy and did not adequately compensate Indigenous landowners.

In June, a U.S. District Court in Wisconsin ordered the Canadian pipeline company to relocate the Line 5 oil pipeline away from the Bad River Reservation within three years or halt its operation and pay the band US$5.15 million for trespassing.

While the U.S. argued the court was correct that Line 5 was trespassing, it did not consider “trade and diplomatic relationship with and treaty obligations to Canada,” the Department of Justice said in a brief filed with the U.S. Court of Appeals for the Seventh Circuit.

The brief also suggested restitution be reconsidered, given Enbridge “earned well over $1 billion in net profit from Line 5” during the 10 years it used tribal land.

Enbridge has been enmeshed in multiple court battles over Line 5, a crucial conduit for delivering millions of gallons of oil from Western Canada to refineries in the U.S. Midwest as well as in Ontario and Quebec.

A Line 5 shutdown is “not in the public interest as it would negatively impact businesses, communities and millions of individuals who depend on Line 5 for energy in both the U.S. and Canada,” Enbridge said in a statement.

Source: BNN Bloomberg, Financial Post, MT Newswire