Month over month Canadian manufacturing sales were down 0.1 per cent Friday morning when a decline of 0.9 per cent was expected.
RBC economists published their monthly report on the domestic housing market with the title “The Payback Continues,”
“The swing in resale activity – from a record high in December to a nearly five-year low in February – is largely in response to tighter qualifying requirements for uninsured mortgages introduced on Jan. 1. January’s interest rate hike by the Bank of Canada also might have impacted sales activity in February…. A good portion of the slowing in resales early this year simply reflects payback for activity pulled forward into 2017. But the scope of declines suggest tighter mortgage regulations are indeed having a cooling effect. Whether that impact is largely psychological or reflects a substantial pool of buyers being shut out by stricter qualifying rules remains to be seen.”
“@SBarlow_ROB RBC on Canadian housing market; The Payback Continues” – (excerpt) Twitter
“Canada Household Debt-to-Income Ratio Holds Near Record High” – Bloomberg
The loonie has been taking a beating this week, lower by a cent and a half to 76.40 US cents and an eight-month low,
“The market has been absorbing comments from Bank of Canada Governor Stephen Poloz on Tuesday that reinforced expectations the central bank would lift rates gradually from here. Policymakers have raised borrowing costs three times since July…Data showing home sales fell in February as tighter mortgage rules introduced at the beginning of the year hit demand underscored the narrative that the Bank of Canada would have to proceed cautiously, said Andrew Kelvin, senior fixed-income strategist at TD Securities.”
“Canadian dollar hits eight-month low as traders weigh gradual rate hikes” – Globe and Mail
“Loonie at lowest since last June amid murky trade outlook” – BNN
Most equity strategists agree that the post-crisis global market rally is in its late stages. In previous cycles (particularly 2007), the first clues to head for the exits came from credit markets. Just saying.
“The unsolved problem of illiquid bond funds” – FT Alphaville (free with registration)
“Investors Pare Back $1 Trillion Bond Bet” – Bloomberg
“Guggenheim’s Minerd Expects More Than Three Fed Hikes in 2018” – Bloomberg
(chilling) Tweet of the Day: “@k_chiglinsky Sometimes when I’m reading about long-term care insurance, I get a little chill down my spine when I think about the problems of aging populations. This article about elderly Japanese women stealing just to get in jail gave me that same feeling. bloomberg.com/news/features/…” – Twitter
Diversion: “The 100 best comedy movies of all time, according to critics” – Business Insider