http://ca.news.finance.yahoo.com/s/...unemployment-rate-falls-first-time-since.html Real, actual, full time job creation. Been a while since we've seen this!
Good news. But Canadian interest rates are way too low. Housing could easily bubble this year, if it hasn't already. 20-50% appreciation across non-oil patch markets in 8 years, is disconcerting. Consumer credit grew some ~50 Billion. Bullish for short-term demand. But it can't last.
I beg to differ. If the unemployment trend can continue to improve, mortgages will still be paid off which will keep the excess inventory down. We saw depreciation this year, albeit slight. Banks are much smarter with regards to who they give mortgages to up here.
Indeed. We need the Fed to raise first. I suspect BOC will raise at the same time and in the same proportion.
Which is why its troubling. Canada has tied its fate to America, and by proxy, China. Rate hikes are unlikely. So we'll import American inflation - and future bubbles - by printing.
A lot of central banks are in that position, could you imagine the dollar destruction with the ECB raising rates before the US.
We either get big inflation or a housing crash. Sure housing and consumer credit are doing great - at 0.25% interest rates! What happens to demand when BAC raises 2 or 300 basis points? Cost of carry will go up 50%, for most buyers. Yea, lending standards are better. Homes are still overvalued. If we don't raise, gas will go back to 1.50$. Catch 22. Between a rock and hard place. Just like the FED.
This is why new free trade deals like the one signed with the EU this year are so important. The process has begun to diversify away from the USA but the quicker it happens the better.