I don't understand why CAD is still so weak against the dollar when a) the interest rate is higher and b) oil is stronger, which is correlated 90% with CAD and c) the US has a lot of uncertainty around the election. I realize that Yellen might raise rates but what is keeping Canada weak? Are traders expecting the real estate bubble to burst and the BOC to lower rates in response?
Prices of Crude are low when it comes to the B/E point that Alberta needs. You need to see crude above 60 Cash to see any improvement, IMPO.
The Canadian economy hasn't been doing so hot recently. Specifically, the non-energy exports story just hasn't materialised.
Understood As far as real estate, I am not sure whether it is a bubble. The population coming to Canada to big cities is coming in with serious money and they are working class. For example, I see the expansion of suburbs from the big cities and these are populated areas. This is not the case that you had in the USA where you would go to Miami Beach, and in a luxury condo there was one apartment with lights, and the rest where just waiting for prices to go up. We know how that ended. I never got the impression that CAD speculators driving the prices up, but I could be wrong.
that's true, retail sales have been negative. but oil is coming back, and I would expect the currency to anticipate that.
Short USDCAD. It will go against you for a while, but eventually will be profitable. Its a slow and easy way to win some cash.
Interest rate is low for Canada as well, and they are not going to be the first to raise since commodities are still under pressure... so economy in Canada is weaker as well...
Rated have been pretty stable here. Lots of banks calling people up and offering 5 year locked mortgages at like 2.9 percent. Real estate is pretty stagnant where I'm from on the east coast, not much industry in these parts and everyone packed up to the western provinces for gas and oil country. Which really has taken a hit with oil prices. Vancouver could be on its way to a bubble but think the province just passed some laws on foreign owned property because it was getting to out of control. The oil sands have really took a hit. No major jobs on the go. I spent a few years working on some projects that would be 10000 guys in the middle of no where. Their was a few going on at any time. They drove everything from airlines since I'd say over half the workforce was from the other side of the country. Companies paying for your flights and camps or living allowance. The amount of support staff and outside industry this created has really slowed down to a scary point. Even if oil rebounds these projects take years to get off the ground and theirs none on the books that I've heard of. Few large LnG plants on the west coast still in limbo.
Canada has an environmentalist, no growth, narcissistic "selfie" PM (former drama teacher). Three more years to go until the next election. Three days after he was elected, he stands on the world stage and declares Canada is no longer a resource nation. Kevin O'leary from "Shark's Tank" is considering running for Canada's top job. The housing market is hot in Toronto, where I'm from, and it really comes down to supply and demand. There is a real shortage of single detached homes being built. If there is a correction, it will be the condo's that will get bitten. Best move I ever made was selling the condo seven years ago and buying a single detached home. I keep my eye on the mortgage insurer's up here, MIC and HCG, who take on the riskier stuff, but my guess is we're 3 or 4 years away from any rate increase, which would trigger defaults, like what happened in the U.S.