- Canadian dollar at about 76.5 cents
- Markets mixed: Asia down, Europe up
- New York futures mixed
- Counting multimillionaires
- What to watch for today
It’s expected to be 26 degrees and sunny in Orlando today.
If you happen to be there for March break, enjoy it. Because you won’t enjoy the cost of dinner tonight.
The Canadian dollar is near 76.5 US cents today, driven lower by a stronger greenback and economic indicators at home. Thus, the buying power of a Canadian on vacation is that much less.
(Maybe you should have gone in early February – to the beach, skipping Mickey and without the kids – when the loonie was worth 81.5 US cents.)
So far today, the Canadian dollar has traded at between 76.5 and 76.7 US cents, having taken a sharp tumble Thursday.
“This is definitely a broad USD move as opposed to just a USD/CAD move,” said Bipan Rai, North American head of foreign exchange strategy at CIBC World Markets, referring to the U.S. and Canadian dollars by their symbols.
“For catalysts, we’d point to incoming White House economic adviser Larry Kudlow’s endorsement of a strong USD, along with some residual impact from the U.K./Russia diplomatic spat that’s now involving Germany and the U.S.,” he added.
That’s how the rise in the U.S. dollar affected the loonie. But there were also fresh numbers Thursday from the Canadian Real Estate Association showing home sales across the country tumbling in February.
Sales fell 6.5 per cent from January, marking the second monthly decline in a row in the wake of new mortgage qualification rules from the Office of the Superintendent of Financial Institutions, the commercial bank regulator.
“Taken with the January decline, that’s amongst the largest two-month decline in the series, and indicative that the effect of the new mortgage measures will present a headwind to growth in Q1,” Mr. Rai said.
Global markets are mixed so far, down in Asia but up across Europe.
Tokyo’s Nikkei lost 0.6 per cent, Hong Kong’s Hang Seng 0.1 per cent, and the Shanghai composite 0.7 per cent.
In Europe, London’s FTSE 100, Germany’s DAX and the Paris CAC 40 were up by between 0.1 and 0.4 per cent by about 5:30 a.m. ET.
New York futures were mixed, and little changed.
The number of multimillionaires in Canada is growing again after a few lean years. As are those best described as even multier.
And their ranks are forecast to expand even more, so you’ve still got a chance.
The number of Canadians worth US$5-million or more dipped last year to 76,720 from 84,510 five years earlier, according to the Knight Frank real estate consulting group. But the 2017 figure marked a rebound of 16 per cent from the number in 2016. What’s more, Knight Frank expects more than 97,000 of those rich folks by 2022.
It’s a similar story for those worth US$50-million or more, of whom there were less to begin with. Their ranks slipped to 5,500 last year from more than 6,000 in 2012, but still saw a rebound from 2016. And, who knows, if you’re lucky you may be one of the almost 7,000 in the 50-plus group expected over the next five years.
We’re talking about a really small group when we get into the category of US$500-million or more, just 270 people in 2017 compared with 300 five years earlier. (I know, it sucks to be one of those 30.) Again, the 2017 number was higher than that of 2016, and we can expect 340 by 2022.
Watch Canada’s housing markets, too, though housing may be too simple a word here. Here’s Knight Frank’s look at luxury real estate, tracking “the performance of the world’s leading prime second home and city residential markets.”
“With global wealth flows and house prices rising in tandem, policymakers are walking a fine line between trying to attract investment at the same time as ensuring affordability for residents, reducing the risk of house price bubbles and maintaining tax revenue,” Knight Frank said.
“In some markets, overseas buyers have borne the brunt of these measures; in others, domestic buyers have also had their wings clipped,” the group added.
“In an era of low growth, the option of monetary tightening has largely been off limits for over a decade. Instead, cooling measures have become the go-to means of controlling price inflation, gradually eroding the notion of truly open markets.”
Knight Frank noted the moves by British Columbia and Ontario to tax foreign buyers of real estate in certain areas.
The Fitch Ratings agency said just yesterday that it expects B.C.’s new housing affordability plan will at least slow the pace of increase in real estate prices, and probably “lead to a price correction,” particularly in Vancouver.
“The new measures will make investing in the Vancouver housing market less attractive and reduce the number of foreign buyers and speculators interested in the Vancouver market,” Fitch said.
“The high-end single family and condo markets in and around Vancouver, where foreign buyers and speculators tend to invest, will be the most impacted,” it added, noting Canadian statistics that indicate foreign buyers own just 5 per cent of Vancouver properties.
Observers expect Statistics Canada’s monthly report on manufacturing sales to show a decline of up to 1 per cent in January.
“Disruptions to auto production will once again play a part due to shutdowns at an Oshawa plant, which should drive a sharp decline in transportation equipment sales,” TD said in a lookahead.
“Meanwhile, the broad decline in exports bodes poorly for factory output as a whole,” the bank added.
“Energy should provide an offsetting source of strength on higher prices for refined products, though we see headwinds to forestry products after the U.S. resumed collecting duties on softwood lumber.”