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Bank of Canada says there is “vulnerabilities” in housing sector

The Bank of Canada has released its latest quarterly data on indicators tracking vulnerabilities in the Canadian housing market and household finances. This update, released on September 20, continues the Bank's ongoing efforts to monitor potential risks associated with elevated household debt levels and high house prices.

The Bank's monitoring approach focuses on two key areas of vulnerability: the high level of household indebtedness and inflated house prices. The indicators include metrics such as loan-to-income ratios, loan-to-value ratios, and mortgage debt service ratios for new mortgages.

You can read more on the matter here.

What’s going on?

• Chrystia Freeland Says Bank of Canada’s Monetary Policy Still ‘Contractionary’ (theDeepDive)

• World leaders to meet at UN under shadow of global divisions, three wars and possible Mideast conflict (Globe)

• Western Nations Unite to Challenge China’s Dominance in Critical Minerals Supply Chain (theDeepDive)

• US to donate 1 million mpox vaccine doses to halt outbreak in Africa (Reuters)

• U.S. politicians press Canada in writing on anti-forced-labour failure (CBC)

• Rio Tinto Calls for Increased Exploration Amid Global Energy Transition Demands (theDeepDive)

• Trudeau Aims to Match Biden on Banning Chinese-Made Car Software (Bloomberg)

• OpenAI’s Altman and Apple’s Ex-Design Chief Ive Collaborate on Mysterious AI Device (theDeepDive)

• Top Economist in China Vanishes After Private WeChat Comments (WSJ)

What’s the latest?

• Cineplex Fined: Cineplex Inc. plans to appeal a $38.9 million fine imposed by the Competition Tribunal for deceptive marketing practices related to its online booking fees. The fine stems from a case accusing Cineplex of "price dripping" by not disclosing the full cost of movie tickets upfront, including a $1.50 booking fee introduced in June 2022.

• Immigration: Canadian Immigration Minister Marc Miller is urging stronger measures to prevent the misuse of visitor visas, particularly by those entering Canada to seek asylum or cross into the U.S. The increase in migrants, especially from India, has raised concerns, prompting the government to explore new "visa integrity measures." Miller acknowledged a significant increase in migrants entering the U.S. from Canada, with U.S. Customs and Border Protection reporting nearly 22,000 encounters along the northern border between October 2023 and August 2024, compared to fewer than 9,000 the previous year.

• Boeing Strike: Boeing presented its "best and final offer" to 33,000 striking machinists, proposing larger raises and bonuses, but the workers' union, the International Association of Machinists and Aerospace Workers, rejected the proposal and refused to hold a ratification vote by Boeing's deadline. Boeing's offer includes a 30% pay raise over four years, an increase from 25%, and a $6,000 ratification bonus, but it falls short of the union's demand for a 40% raise over three years and the restoration of pensions.

• China Investing: Former Canadian diplomat Michael Kovrig has warned that China is becoming increasingly "uninvestable" for Canadian businesses due to rising geopolitical risks and uncertainties. In a recent interview, Kovrig advised companies to prioritize other markets if possible or develop exit strategies if they must operate in China. He advocates for strategically "derisking" the economy and cautions that while trade barriers may be necessary, they must be applied thoughtfully to avoid escalation and self-inflicted harm.

• RBC Layoffs: Royal Bank of Canada employees who joined through the C$13.4 billion acquisition of HSBC Canada are worried about job security as a six-month employment guarantee expires. RBC has found roles for nearly 80% of the 4,500 former HSBC employees but some remain unclear about their duties and future roles, leading to concerns about potential layoffs, particularly as RBC aims to achieve C$740 million in cost synergies through restructuring.

Military demand drives antimony prices

The stock market and stuff

• Fed's rate cut offers limited relief for US factories facing China competition (Reuters)

• Bank of Canada Abandons Digital Currency Plans After Years of Research (theDeepDive)

• Yevgeny Prigozhin secretly used JPMorgan and HSBC for Wagner payments (FT)

• Bank of Canada Reports Rising Vulnerabilities in Housing Market (theDeepDive)

• TSX touches record high as commodity-linked stocks jump after China stimulus (Reuters)

In the juniors

• Surge Battery Metals Increases Resource Estimate To 11.24 Mt Of Lithium Carbonate Equivalent (theDeepDive)

• 1.6 Billion Pounds Nickel, Copper, Cobalt in Montana | Stillwater Critical Minerals with Michael Rowley (theDeepDive)

• Golden Cariboo Hits 0.80 g/t Gold Over 204 Metres At Halo Zone (theDeepDive)

• Denison Mines Monetizes Ten Uranium Exploration Properties (theDeepDive)

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