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McLeans market musings for July 25

Blog by Nick Swinburne | July 25th, 2013

The European economy is showing signs of positive growth and industry confidence is on the upswing.  France is showing persistent economic weakness but French industry morale is at the highest level in over a year.    Positive numbers from Germany, Italy and Spain are continuing to encourage central bankers.  Continued positive growth, even at low levels, will take pressure off of central bankers to make dramatic move to further stimulate the European economy.

However, the weakness in China’s economy continues to be a concern for the global economy.   China’s manufacturing sector has been a driving force for many years and although the global economy will feel the effects, it is important to remember that China’s economy is still growing at over 7.5% per year.   This is relatively low growth for China but it would be absolutely huge for any other major economic region in the world.  As China’s economy continues to mature, this relative slowing of growth will become par for the course.

In the US, the potential of a reduction of Quantative Easing (stimulus program) has mostly disappeared from the headlines for the short term.  This eventuality will make news again and when it does the markets will see dramatic swings.  As for now, US new homes sales are up as is manufacturing.   A minor increase in jobless claims is seen as mostly due to seasonal adjustments  and is actually seen as a positive sign since these numbers often show a much poorer performance at this time of year.

In Canada, bond yields remain relatively steady and low rates are providing an excellent opportunity to lock in low financing costs over the long term.  10 year fixed rates are available at 3.99% for some Whistler properties and 5 year fixed terms are available at 3.19% for regular residential properties and slightly higher for other Whistler properties.  Consumers looking to buy long term assets are recommended to consider 10 year terms as this will likely provide significant savings, particularly over the last half of the term.

Variable rates have improved over the past 6 months and are now available at Prime less 0.3% for most Whistler properties and even lower for regular residential properties.  Prime is currently 3.0%.



Jason McLean   BSc, AMPThe Mortgage Centre: Garibaldi Mortgage
fax: 604-905-3801
cell:  604-935-9190