Briefing highlights
- What to expect in housing report
- Global markets mixed, turning sour
- New York futures down
- Canadian dollar above 74 cents
- Annual inflation at 2 per cent
- Tim Hortons parent to expand
- Required Reading
What to expect in report
Expect to see a stronger showing when the Canadian Real Estate Association releases its morning report on April home sales and prices.
Bank of Montreal projects the reading will show sales up and prices flat, the latter actually ending a string of declines.
“Better weather drove better home sales after a challenging start to the year,” said Benjamin Reitzes, BMO’s Canadian rates and macro strategist.
Mr. Reitzes expects to see that existing home sales rose 3 per cent in April from a year earlier, a turnaround from the slump of 4.6 per cent in March.
He also expects to see that average prices were flat from a year earlier, marking the first time in seven months that there wasn’t a drop. Prices fell 1.8 per cent in March.
Along the same lines, the MLS home price index, which is seen as a better measure, is also expected to be flat, following two consecutive months of declines.
We’ve seen reports from local real estate boards, but this will be a national look for April, with the industry into its spring season.
Regional housing markets, of course, have been different.
“Vancouver and B.C. generally remain weak as prices have further to fall after the multiyear sprint higher,” Mr. Reitzes said.
“However, sales appear to have bottomed (or at least are close to) as they sit near prior cycle lows,” he added.
Elsewhere, “there are signs of life in Calgary and Edmonton, though sales are improving off very weak levels,” Mr. Reitzes said.
We’ve already seen Toronto’s numbers, which showed a market rebound.
“And Montreal remained a strong spot, while Ottawa cooled after a solid run,” Mr. Reitzes said.
“Broadly, the 50-basis-point drop in mortgage rates since the start of the year is providing some support to the market; though given debt levels, don’t expect housing to rebound strongly.”
Read more
- Janet McFarland: Toronto home sales surge in April, climb near 17 per cent from last year’s sluggish level
- Brent Jang: Vancouver home sales slump to 24-year low as prices continue to fall
- A ‘foul mood’ in Vancouver, a ‘floor’ in Toronto, a ‘new normal’ in Ottawa: The state of Canadian housing
- Barrie McKenna, Janet McFarland: Bank of Canada urges lenders to offer longer-term mortgages
Stocks mixed
Global markets are mixed so far, and turning sour, at that.
“The fears over the possibility of a substantial reversal of trade war progress has added a substantial amount of volatility to markets, yet, as the past 24-hours have shown, markets still exhibit hope that we could see some form of resolution emerge from this current standoff,” said IG senior market analyst Joshua Mahony.
Tokyo’s Nikkei gained 0.6 per cent, Hong Kong’s Hang Seng 0.5 per cent, and the Shanghai Composite 1.9 per cent.
But things are a little less certain in Europe, where London’s FTSE 100, Germany’s DAX and the Paris CAC 40 down by between 0.1 and 0.8 per cent by about 8:05 a.m. ET.
New York futures were down.
“The euro zone has been in focus this morning, with GDP figures from both the German and euro zone economy for the first quarter,” Mr. Mahony said.
“We have seen few surprises in today’s figures, with quarterly German and euro zone GDP figures coming in at 0.4 per cent as expected,” he added.
“However, the big difference comes when looking at the year-on-year figures, with the German figure of 0.6 per cent standing well down the pecking order in comparison to their European peers. As the trade war continues to roll on, the story of German economic weakness looks likely to continue alongside it.”
The Canadian dollar was above 74 US cents.