Worrisome USA inflation data sets are causing The Bank of Canada’s “Time to First Cut” to be pushed to Q2 of 2023. 2-year yields continue to rise, and the USA FED pressures to increase rates will continue.

The market is now pricing in three consecutive rate hikes in the US. (0.25% x 3 from March to June of 2023). This continues to fuel high bond pricing, and is again putting upward pricing on fixed rate mortgages. See below for a dramatic spike in the bond over the last 3 weeks (data as of March 1st, 2023).

Assuming (and hoping) that the emergence of US inflation is short term, it does not provide any immediate relief for Canada’s numbers. More reason to expect interest rates to remain flat for the foreseeable future. On a positive note, Canada now has one of the lowest inflation rates in the industrialized world and this is one reason why Canada should NOT follow suit in hiking rates further.

As these data set drift further apart in the USA and Canada, this does not help the strength of our dollar. Your next USA trip might just cost you a bit more on the exchange rate!

Next Week BOC’s Announcement

The market is only pricing in a 1% chance of a BOC hike. We will be sure to provide an update after Wednesday with the results.

Bank Exceptions

As our big banks continue to release earnings reports over the coming days, one thing seams to be a common theme – slow volume.

• RBC is down 40% year over year.

• Scotiabank has priced their rates out of market in order to “intentionally slowing the mortgage portfolio”

• CIBC’s personal and banking unit reported a 14% decline in net income.

As purchases are scarce, brokers are focused on re-amortization files and helping clients switch institutions for lower interest rates.

Realtor Vegas Trip

Our first annual realtor trip was a great success. We had 20 people join us this year, and it was a way to reward our top performers. We will be continuing the trip in 2023 and qualifying is simple;

*Send us $1,500,000 in closed mortgage volume and you are automatically qualified!

Fast Facts

• €1.2 billion – That’s how much revenue Adidas stands to lose if it can’t find a way to offload inventory of rapper Kanye West’s Yeezy shoes.

• 51% – Projections of the global population (more than 4 billion people) expected to be overweight or obese by 2035, according to the World Obesity Federation. Health conditions linked to being overweight will cost the global economy US$4 trillion annually by 2035, or 3% of GDP.