The European Central Bank kept interest rates unchanged this morning and was hopeful that economic growth would turn positive in 2014. The European economy is still in a state of contraction and if things do not improve, rate cuts may still occur to provide additional stimulus.
Weak manufacturing numbers in China seem to show that economic recovery there will take a while before it returns to the high levels of the past decade. Overall global demand needs to increase before China’s huge manufacturing sector is able to lead the country’s economy again.
In the US, the labour market continues to show steady improvement and the overall economy is showing potential for moderate growth over the medium term. The Federal Reserve is continuing with huge stimulus measures until the economy improves further. The stock markets are concerned about the potential withdrawal of the stimulus measures and with how soon this may occur. If economic news, such as tomorrow’s May job numbers, are too positive then the reduction of stimulus measures may come sooner than expected.
The new Governor of the Bank of Canada, Stephen Poloz, addressed the House of Common Finance Committee this week. Although he has been on the job less than a week, his comments were watched closely for any hints of a change in policy for the central bank. He maintained that the current inflation targets remain the main focus of the central bank and he also made comments that seem to indicate that he is not too concerned about the strength of the Canadian dollar at this time. So it seems that the status quo remains for now, although we will likely see Poloz put his own stamp on some policy initiatives over the next year. His comments, along with positive labour and housing data, caused the dollar to increase over $0.01 this morning to $0.975.
Bond yields have been steady this week, but are still up a bit from a month ago. More lenders have begun to increase some fixed term mortgage rates but there are still a number of lenders with very low fixed term rates. 5 year rates are still available at 2.89% for most Whistler properties and 10 year terms are still available at 3.69%.
Please remember that 80% financing is available for qualified US residents at great rates!
The Mortgage Centre: Garibaldi Mortgage