Markets come back as if yesterday didn’t happen

By MoneyWay | May 20, 2021

Yesterday morning equity indexes were down significantly and then closed on the day although down but higher than the lows. This morning, equities have regained yesterday’s losses and are hovering around Tuesday’s levels. Most commodities have moved higher, giving strength to the Canadian dollar to the USD.  However, the Bank of Canada stated in its annual Financial Systems Review that its watching house prices again, its familiar song of too much household debt is number one on its Top Ten list. It’s worried that Canadians are being lulled into a sense of complacency that house prices have only one way to go, and that is up. The BoC is worried that if the economy should have a downturn those with excessive mortgages maybe unable to handle the shock. That being said, the other side of the coin the BoC stated that Canada’s financial system could withstand significant financial shocks and could absorb significant losses.

Volatility will now be part of the financial markets in the short term, and looking for set trend might be difficult to do, pick your levels that you need to trade in order to do business.

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