In its annual Financial System Review, Canada’s central bank cited slowing growth, trade uncertainty, falling oil prices and riskier borrowing in the corporate sector as reasons why risks to financial stability have picked up. At the same time, key vulnerabilities in the system that would amplify shocks — primarily high household indebtedness and pricey housing markets — have eased, it said. The Canadian financial system’s two key vulnerabilities — debt and housing — remain elevated but the situation has improved, the Bank of Canada said.
Tougher mortgage qualification rules and the central bank’s recent rate hikes have slowed borrowing and improved the quality of new lending, while curbing price growth in the Toronto and Vancouver housing markets, it said. In his statement, Poloz reiterated he remains confident a recent slump in the housing sector will end and the “sector will return to growth” later this year.
The USDCAD is unchanged, again staying within the range expect further range trading. The 30 day simple moving average is 1.3411.
Currently Close Range
USDCAD 1.3438 1.3438 1.3401-1.3450
EURCAD 1.5017 1.5051 1.4996-1.5071
GBPCAD 1.7193 1.7256 1.7165-1.7276
CA: Manufacturing March M/M -0.2% 2.1%
Y/Y 0.9% 2.0%
US: Housing Starts April 1.168M 1.235M
Philly Fed Business Outlook May 8.5 16.6
Jobless claims wk5/11 228K 212K