Fresh Stimulus Propels Emerging Markets to Fourth Week of Gains
Emerging-market currencies dipped Friday on dwindling optimism over Federal Reserve rate cuts, paring their fourth-straight week of gains.
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Emerging-market currencies dipped Friday on dwindling optimism over Federal Reserve rate cuts, paring their fourth-straight week of gains.
The owner of a historic office building in Manhattan’s Financial District has filed bankruptcy to sell the property, which has been subject to foreclosure and suffered from a lack of tenants due to the Covid-19 pandemic.
Deutsche Bank AG has entered a capital-relief deal with the European Investment Bank that allows the German lender to grant discounts on more than €600 million ($652 million) of green mortgages in its home market.
A unit of Abu Dhabi’s Mubadala Investment Co. said it anticipated a roughly $315 million credit hit related to loans issued to the now-insolvent Signa real estate conglomerate.
The Teranet-National Bank composite house price index which tracks home prices in 11 of Canada's largest cities remained stable from March to April.
Feb 24, 2016
Reuters
Boosted by borrowing costs near record lows, the housing market has been one of the brightest spots in Canada's recovery since the global financial crisis.
While house prices in the neighbouring United States have been recovering slowly after the historic crash of 2008, in Canada they have nearly doubled in the past decade with households piling on record amount of debt.
The recent collapse in the price of oil, a major Canadian export, has created a schism in the Canadian housing market.
Two interest rate cuts and cheap debt have pushed prices in the already stretched markets of Toronto and Vancouver to new highs. But in oil-producing provinces like Alberta, job losses triggered by the oil market crash have hit property values and raised fears of a correction that could spill over to other parts of the country.
Indeed, in a December poll , analysts said the housing market would become a drag on the economy in a couple of years.
Still, for 2016, the latest poll of 24 housing market analysts forecast house prices would rise 3.3 percent, an upgrade from 3.0 percent in the previous survey.
"The housing market may remain a key contributor over the next three to six months as the knock-on effects from home prices, sales and housing starts gains can be lagged," said Diana Petramala at TD Economics.
"But the market will likely become a net drag as sales and starts move back in line with historical averages and price growth eases," she added.
The survey predicts house price rises will slow to 1.0 percent in 2017 and then rebound to 2.0 percent in 2018.
After the Bank of Canada cut interest rates last year to soften the blow of the oil price plunge, house prices rose. They have already surpassed the affordability limits of the average Canadian homebuyer in some places.
Even as the economy crawled out of a recession in the third quarter of 2015, the household debt-to-income ratio hit a record high of 163.7 percent. Chances of another recession are seen as high as 35 percent.
However, most economists in the poll negated the risk of a sharp fall in house prices over the next 12 months and forecast home building to remain robust between 180,400 and 185,000 units per quarter this year.
"The risk of a correction in Toronto and Vancouver will increase when interest rates go up, which won't be this year," said Sal Guatieri, senior economist at BMO Capital Markets.
According to another Reuters poll, the central bank will keep rates on hold until mid-2017, partly due to high household indebtedness, which the Bank has acknowledged as one of the biggest risks to Canada's financial system.
Moreover, with the U.S. Federal Reserve expected to tighten policy further this year, Canadian mortgage rates could go higher, increasing the chances of a correction.