Market Update – Influences on Hamilton, Ontario, Canada Mortgages
At our mortgage office, we are diligent about following current market trends and how they will relate and affect the real estate market and by extrapolation, the mortgage market locally in Hamilton, Ontario and in Canada. The economy is closely intertwined with mortgage rates and conditions of lending for first time homebuyers, people refinancing or even people buying multiple homes as investment properties or otherwise.
Global markets are retreating after recovering from the Brexit hangover as reality now sets in regarding the uncertainties of a new world order of a UK outside of the European Union. With sentiment sagging, safe haven assets continue to rise with gold and low risk bonds rallying, while oil retreats. Bank of England (BoE) Governor started things off with a press conference delivery a grim message on the realities of a Brexit and the consequences to England’s economy, plunging the sterling to another historic low. Data out of China isn’t helping as manufacturing stalled last month, while the service sector looked modestly better, increasing the jitters regarding the Yuan’s stability. Europe is down with financial stocks under pressure, and overnight in Asia most major markets closed also closed in the red.
In the U.S, Wall Street is back in action after the Independence Day long weekend, and is down on a risk off note after last week’s strong post Brexit bounce as global growth concerns rears its ugly head once again. 7 of 10 S&P sectors are lower with financial, industrials and energy taking the brunt of the risk off trade. With the BoE spelling out challenges for a post Brexit UK and China continuing its arduous economic transformation, investors will keenly watch moving forward what the Feds next step will be. With 10 and 30 year U.S bond yields now at historic lows, markets are betting the Feds raise rates until at least next year or beyond.
In Canada, the TSX is losing some ground after yesterday’s triple digit gain as global growth concerns sink commodities. 7 of 10 sectors are lower with energy stocks leading decliners as oil retreats by 4.00% on today’s risk off mentality and re-emerging supply concerns. The loonie is also getting hit after its recent rally as investors seek comfort today in the USD. However, gold continues to be supported on safe haven demand as sovereign bond yields continue bottom out and expectations remain virtually zero for a Fed rate hike soon. Finally, Friday could be the last delivery day for your mail as Canada Post has issued a 72 hour lockout notice to the Canadian Postal Union, allowing the corporation to “take measures that are necessary to respond to the changing business reality.”
The S&P500 is down 16 to 2,087, the DOW is down 100 to 17,850, the NASDAQ is down 45 to 4,817 and the TSX is down 74 to 14,183.
The Loonie is down 73bps to US$0.7712. Bond yields are lower with the CDA 5-year at 54% and the 10-year at .99%, Gold is up U$7.90 to U$1,347/oz., Silver is up 17 cents to US$19.76/oz, natural gas is down 19 cents to U$2.79/btu, copper is down 5 cents to $2.17/lb, and Oil is down U$2.18 to U$46.81/barrel.
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