Weekly Digest

Inflation Report

Year over year inflation came in at 2.80%. This was a surprise reading below last month’s 2.90% and well below market expectations of 3.10%. This also headlined the lowest reading since June of 2023. 

The forecast for a rate cut in June is now priced in at 70%.

U.S Fed Announcement

Are rate cuts still the expectation in the US?

• Yes. Projections are for 3 cuts this calendar year. This helps Canadian’s as we closely follow the US.

How is sticky inflation data impacting decisions?

• “We were right to wait,” Powell noted this week, noting that he doesn’t know if inflation’s recent strength is “a bump in the road or something more.”

How does employment data impact decisions?

• From below, we can see unemployment is rising, and full time employment is now falling. Things to watch for over the coming months.

Jobs Report

Canada:

• +40,700 jobs added vs +20,000 consensus

• Unemployment rose to 5.80%.

U.S.A:

• +275,000 jobs added vs +200,000 consensus

• Unemployment climbed to 3.90%.

Jobs report data sets can be a bit misleading. Something to watch is there are 90,000 more unemployed people in Canada today vs Feb. 2020 (just prior to the pandemic). In December and January, it was 100,000 more.

Furthermore, many of these jobs are being offset by the public sector which often inflates the data.  

Housing Gap Continues to Widen

With the influx of immigration, we continue to fall behind on completed units. The shortfall continues to grow.

Current Interest Rates

CONVENTIONAL

• 5 year fixed, 30 yr amortization – 5.09%

• 3 year fixed, 30 yr amortization – 5.29%

• 2 year fixed, 30 yr amortization – 6.00%

• 5 year variable, 30 yr amortization – Prime – 0.60% = 6.60%

• 5 year fixed, 25 yr amortization – 4.99%

• 3 year fixed, 25 yr amortization – 5.19%

• 2 year fixed, 25 yr amortization – 5.90%

• 5 year variable, 25 yr amortization – Prime – 0.70% = 6.50%

INSURED

• 5 year fixed, 25 yr amortization – 4.89%

• 4 year fixed, 25 yr amortization – 4.89%

• 3 year fixed, 25 yr amortization – 4.99%

• 5 year variable, 25 yr amortization – Prime – .90% = 6.30%

Fast Facts

• 20 – Months since Sweden submitted its NATO application alongside Finland, a wait that ended last week when the Nordic country was finally approved for membership.

• 41% – How much business insolvencies jumped in the last quarter of 2023 compared to the previous year, a trend that experts say could get worse.

• 0.15% – the amount the carbon tax bump on April 1st will add to inflation