These are stories Report on Business is following today. Get the top business stories through the day on BlackBerry or iPhone by bookmarking our mobile-friendly webpage.
Follow Michael Babad on Twitter
What will drive the loonie? The volatile currency markets have so far ignored the political uncertainty in Canada. Hey, it's not like we're Portugal, where a debt crisis and political void have driven government borrowing costs to fantastic heights and threaten to sink the country.
The federal campaign has only just begun, and anything could happen, but most observers believe the Canadian dollar will hold generally firm throughout, more likely to be moved by global developments and oil prices than by domestic political ones, given Canada's strong economic and fiscal standing among its peers.
"Though an election campaign is now under way, we expect political developments to have no material impact on [the Canadian dollar]" Elsa Lignos, senior currency strategist at Royal Bank of Canada Europe, said today.
"The [Bank of Canada]meeting on 31 May is likely to be fully four weeks after the election, and while it is quite possible that the political situation won't be clarified by then, it is also possible that the political situation will remain unclear three to four months from now."
As in the 2008 election, which was called just a week before the collapse of Lehman Bros. drove the world into its ugliest economic period since the Great Depression, many developments are at play in 2011, including Europe's ever-mounting debt troubles, the uprisings and violence in the Middle East and North Africa, and the devastation and nuclear crisis in Japan.
"Political uncertainty will be a looming question, however the global market has become quite comfortable with Canadian elections, the differences (or lack of) in our parties and a minority government," said Scotia Capital currency strategist Camilla Sutton.
"Accordingly, we think in the medium term the focus should reside with the strong sovereign position in Canada and less with political uncertainty."
It wasn't always thus. Our slideshow, based on research by BMO Nesbitt Burns senior economist Michael Gregory, shows the loonie has oft been moved, in either direction, by electioneering and its outcome.
In the 1988 campaign that centred on the Canada-U.S. Free Trade Agreement, for example, the loonie initially climbed 0.6 per cent, then slumped by 3.2 per cent, and then shot up again by 2.1 per cent. At the end of the day, it lost 0.6 per cent.
Primer on the election and economic issues Where the economy is concerned, this campaign comes at a delicate moment. The global recovery is fragile, Europe is grappling with a debt crisis, and the Middle East and North Africa are in the midst of an unprecedented battle for sweeping political in social change.
The backdrop in Canada is one of economic growth, a rebound in the labour market but still high unemployment, and jittery consumers still rattled by the recession and, now, by the personal debts they've built up. Personal wealth has climbed back, driven by the rebound in stock prices and house values, and the recovery is solid, though growth is expected to slow later this year. And interest rates remain low, but are expected to begin rising again.
Stephen Harper called the May 2 election Saturday, saying this campaign was all about the economy, though for his opponents there's also the small matter of ethics. It will be worth watching the major economic signals over the course of the campaign. Read our primer in Economy Lab.
Shuffle at CIBC Sonia Baxendale, the head of the bread-and-butter retail banking business at Canadian Imperial Bank of Commerce , is leaving the bank, The Globe and Mail's Tara Perkins reports today.
CIBC announced her departure but did not give a reason for it. Ms. Baxendale had steadily been given increased responsibilities at the bank, and was widely considered to be a top candidate to replace chief executive Gerry McCaughey when he retires.
Richard Nesbitt, who runs the bank's capital markets operations, is being given new responsibilities, which signal he's now the top contender in the succession plan.
EADS strikes Vector deal The biggest aerospace company in Europe has struck a $625-million deal for Canada's Vector Aerospace Corp. , a helicopter repair and maintenance company.
Eurocopter Holding, a subsidiary of EADS, and Vector unveiled the $13-a-share cash deal today.
"We believe that being part of the Eurocopter group will allow Vector Aerospace and our people to pursue our long history of profitable growth and excellent levels of quality and customer service," said Vector chief executive officer Declan O'Shea.
Euro zone and Twilight Zone The euro monetary union is sinking ever deeper into the muck.
Not only are observers downbeat on the EU summit that ended Friday, but German Chancellor Angela Merkel is suffering voter setbacks.
"For quite some time the markets had expected the EU summit at the end of last week to begin to tackle some of the issues with respect to the sovereign debt problems that have been causing problems in Europe for over a year now," CMC Markets analyst Michael Hewson said today.
"Given EU leaders pre-disposition for kicking the can down the road over the past 12 months the markets somewhat naively thought that this might be the beginning of the first small steps in tackling the problems, until Portugal's government failed last week in trying to pass another austerity budget, and provoking another crisis," he said in a research note.
"With Portugal remaining in denial about its need for a bailout the optimism that had been driving the single currency higher now looks hopelessly misplaced and weekend events in Germany could well cause further problems."
Last week, the EU summit signed off on a permanent bailout fund for the 17-member monetary union that will kick in in 2013. At the same time, Portugal inched ever closer to seeking a bailout amid a political void sparked by a parliamentary rejection of austerity measures.
Then, on the weekend, Ms. Merkel's coalition lost a key region in state elections, one it had held for half a century. She lost it to the Greens, which signals worries over her government's nuclear policy, but analysts said her European policy may have been a factor as well.
"Having lost two elections in a row in areas where there is normally strong support there must be doubts about whether Merkel's policy on Europe has the support of the German people and this could call into question Germany's role as Europe's cash machine with respect to the bailout fund and any future agreements," Mr. Hewson said.
Carl Weinberg, the chief economist at High Frequency Economics, did a brutal weekend take on the situation in Europe, with an introduction similar to that of the old hit TV series Twilight Zone.
"No, you have not entered the Twilight Zone," Mr. Weinberg said. "Rod Serling is not on hand to end this insanity with a plausible, if somewhat sketchy, explanation of your plight. You are, instead, in Euroland, where the financial stability of the second-largest composite economy on the planet is sliding backwards - ever faster - down a steep hill. Prospects for excape become grimmer with every failed effort to regain traction."
He noted that the technical issues related to the permanent bailout fund, which would replace an existing plan, won't be completed until June, while the permanent fund is still years away.
"This is not a credible remedy for Portugal - which may need help as soon as this week - or Spain when its banks fail," he said.
Boyd Erman's Morning Meeting
Europe's banking regulator plans a review of all bonus payments at the continent's big banks to determine if they are in line with new capital rules, Streetwise columnist Boyd Erman writes.
In Economy Lab today
Liberal leader Michael Ignatieff's comments on corporate taxes make no economic sense, they're just election sound bites, Stephen Gordon writes.
In Personal Finance today
This year's tax filing deadline is May 2. Here are Dianne Nice's 10 tips to make the most of your deductions and stay on the right side of the law.
The authors of 78 Tax Tips For Canadians For Dummies explain how filing a tax return can lead to free money.
How can you prepare your investments for the shocks that follow unforeseeable events? Here are a few tips from Home Cents blogger Sonali Verma.
From today's Report on Business