TSX Rally Resumes Amid Grocery Merger Talks -- Canadian Commentary

(RTTNews) - Canadian stocks rallied Wednesday after Bank of Canada governor Steven Poloz said the central bank is concerned about low inflation and may keep interest rates on hold.

Poloz said there's no "predetermined path for interest rates," and said the central bank will proceed "cautiously" with monetary policy.

The TSX Composite Index jumped 133.53 points to 15,607, the highest since June.

Convenience store operator Coutu Group (PJCa.TO) and grocery chain Metro Inc. (MRU.TO) confirmed advanced talks on possible takeover Wednesday afternoon. Shares of both companies moved sharply higher.

The U.S. Department of Commerce imposed duties on Bombardier Inc.'s (BBD_B.TO, BBD_A.TO) marquee jetliner, after Boeing Co. (BA) had complained that the Canadian planemaker received unfair subsidies.

Bombardier said, "We strongly disagree with the Commerce Department's preliminary decision. The magnitude of the proposed duty is absurd and divorced from the reality about the financing of multibillion-dollar aircraft programs. ...Boeing is seeking to use a skewed process to stifle competition and prevent U.S. airlines and their passengers from benefiting from the C Series."

Shares dropped 6 percent.

It's been a rough week for Bombardier. German industrial company Siemens AG on Tuesday agreed to merge its rail operations with French train maker Alstom SA instead of Bombardier.

Gold futures tumbled as traders assessed hawkish remarks from U.S. Federal Reserve Chair Janet Yellen.

"We should be wary of moving too gradually," Yellen said in a speech to the National Association for Business Economics meeting in Cleveland.

"Given that monetary policy affects economic activity and inflation with a substantial lag, it would be imprudent to keep monetary policy on hold until inflation is back to 2%," she said.

EnCana (ECA, ECA.TO) announced it has successfully started up the Tower processing plant ahead of schedule and under budget on September 20.