Daily Market Update

Bank of Canada’s policy report due this week; could be rate clues
When the Bank of Canada releases its latest monetary policy report this week, mortgage lenders will be looking for any hints that could suggest an interest rate cut. It’s been three months since the last one, but since then there has been a more cautious approach to further cuts. Most experts are not expecting this Wednesday to bring good news for borrowers; the bond markets, for example, are only factoring in a 10 per cent chance of a cut. The policy may be more revealing as the central bank weighs the continued weakness in the oil industry and sets out its forecast for the wider economy. There is little consensus on whether further interest rate cuts will be required and even less on when and how fast they might happen. This week’s report may provide some clues.
Is Edmonton avoiding the impact of the oil downturn?
Data released on Friday suggests that Edmonton is avoiding the worst impact of the oil downturn in Alberta. Figures from Statistics Canada showed better-than-expected employment levels, while CMHC’s housing start stats were also far from disastrous. Although unemployment did rise, from 4.8 per cent in February to 5.3 per cent in March, it is still well below the 6.8 per cent national average and Alberta’s 5.5 per cent. Meanwhile, housing starts increased to 1,727 in March, almost 1,000 higher than a year earlier. City of Edmonton chief economist John Rose told the Edmonton Journal that the region is not as closely linked with the oil industry as the rest of the province, adding that: “We’ve got a lot of suppressed demand on the housing side that’s continuing to support our construction sector.”
Toronto building boom is ending says TD
A new report from TD Bank says that the building boom in Toronto is coming to an end. It predicts that house prices will reach their peak and decline soon and a large supply of new condos this year is the “greatest near-term risk for the market.” The report suggests a “cyclical downturn” rather than a crash though with condo prices trending lower in the coming years. It warns that investors may start pulling out of the condo market as prices start to dip. 

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