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That sound you hear this week will be the thud of Canadian home sales.

We’ve already seen reports from several local real estate boards, notably those in Toronto and Vancouver, so we know Friday’s national look from the Canadian Real Estate Association won’t be pretty.

This comes amid new mortgage qualification rules from the Office of the Superintendent of Financial Institutions, the commercial bank regulator, which added to measures from the Ontario and B.C. governments to cool the housing and debt markets.

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Benjamin Reitzes, Canadian rates and macro strategist at BMO Nesbitt Burns, expects Friday’s report to show home sales across the country tumbled 17 per cent in March from a year earlier, or “a bit worse than the prior month.”

As The Globe and Mail’s Janet McFarland and Brent Jang report, Toronto and Vancouver readings have already highlighted hefty declines, though Toronto prices are stabilizing.

“The broader market continues to adjust to stricter mortgage regulations, with Toronto cooling sharply amid a 40-per-cent plunge in activity,” Mr. Reitzes said.

“While the same can be said of B.C., Vancouver, Fraser Valley, Victoria and the surrounding regions also had to deal with an increased foreign-buyers tax that was introduced as part of the B.C. budget,” he added.

“There were steep declines in Calgary, Windsor and London, as well, while Ottawa was one of the few bright spots with sales up double digits (thank you, higher federal government spending).”

Mr. Reitzes also expects the report, the third of three on the housing sector this week, to show average prices down 5 per cent from a year earlier, but the MLS home price index, considered a better measure, up 6 per cent.

Don’t read too much into that last number because it would still mark the slowest pace in almost three years.

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Even aside from home sales, it’s a relatively busy week, with a market focus on the Bank of Canada, the tit-for-tat rat-a-tat-tat from trade officials in Washington and Beijing, and the start of U.S. bank earnings.

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Investors will be watching for how markets open after last week ended with a thud as everyone fretted over the U.S.-China trade spat and a disappointing U.S. jobs report.

Here’s the toll so far this year: The S&P 500 is down 2.6 per cent, the Dow Jones Industrial Average 3.2 per cent, and the S&P/TSX Composite Index 6.2 per cent.

“The growth-dampening/inflation-spurring threat of an escalating trade battle is certainly not good for market sentiment, which came into the year hopped up on enthusiasm,” said BMO senior economist Robert Kavcic.

The Nasdaq is still up for the year, at 0.2 per cent, but don’t expect that to last long at this rate.

“The tech sector also remains under pressure with Facebook’s brass testifying in Washington on the data breach, and [U.S.] President [Donald] Trump launching angry tweets at Amazon,” Mr. Kavcic said.

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This is also a big day for the Bank of Canada, which releases its widely watched business outlook and senior loan officer surveys.

Markets will be watching for what that survey suggests about the timeline for higher interest rates.

“The Bank of Canada’s business outlook survey (BOS) should reinforce the wider slowdown in the Canadian economy with a more cautious assessment of business conditions, but will stop short of sounding outright dovish,” Toronto-Dominion Bank economists said in a lookahead.

“Since the previous survey, the economy has been subject to greater uncertainty on trade, a sharp minimum wage hike and a broad slowdown in housing, all the while without any relief on the poor competitive stance worsened by the U.S fiscal reform.”

The survey isn’t likely to reflect the better tone of negotiations to remake the North American free-trade agreement, though, because it was conducted earlier.

“However, external demand remains robust, as evidenced by the pickup in U.S. growth, and inflationary pressures continue to build, especially on the wage front or raw materials,TD said.

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“This suggests the overall tone will be more mixed than the previous survey, but don’t expect to hear firms suggest that growth is stalling.”

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Today brings the first look at the real estate market as Canada Mortgage and Housing Corp. reports on March construction starts and Statistics Canada on February building permits.

Analysts expect to see a 5.1-per-cent decline in the former, to an annual pace of about 218,000, and 2-per-cent drop in the latter.

“A more sluggish pace to housing starts in March lines up with our forecast that residential activity is set to cool this year,” said Royce Mendes of CIBC World Markets.

“Look for starts to clock in just below 200,000 in 2018, down from 220,000 last year as the slowdown in single-family construction outweighs any pickup in condos.”

Delta Air Lines Inc. also reports quarterly results.

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Much on tap for watchers of the Federal Reserve and interest rates.

First up is the U.S. government report on inflation, which economists expect to show no change on a monthly basis, but possibly a slighter higher pace of 2.4 per cent year over year.

Later in the day come the minutes of the last Fed meeting, when the U.S. central bank raised rates by one-quarter of a percentage point and its projections suggested at least two more increases this year.

Federal Reserve chairman Jerome Powell

Joshua Roberts/Reuters

“At the start of the year, there was a lot of chatter that the Fed could hike rates four times in 2018, and the minutes could provide a better insight into what the U.S. central bank might do in terms of future monetary policy,” said CMC Markets analyst David Madden.

Watch, too, as China releases inflation numbers. Chang Liu of Capital Economics expects those reports to show the annual rise in consumer prices creeping up to 3 per cent last month and the producer price index easing to 3.5 per cent.


Mark Carney, who the Bank of England stole from the Bank of Canada, speaks at a Toronto economic summit.

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Bank of England Governor Mark Carney

Victoria Jones/AP

He’s got a lot on his plate, what with Brexit and all, but he’s never been shy when it comes to talking about his home turf, particularly on the housing front.

And, who knows, maybe he’ll talk about how he’d like to be prime minister one day. Of Canada, where things might be easier as we’ve got no one to separate from.

Today also brings the second look at the housing market with the release of the Teranet-National Bank home price index, which Capital Economics expects to show a slower annual pace of 6.4 per cent in March from February’s 7.5 per cent.

“It could take another five months before the annual Teranet inflation rate turns negative,” said David Madani, senior Canada economist at Capital Economics.

And some earnings to note: BlackRock Inc., Brick Brewing Co., Cogeco Inc. and Cogeco Communications Inc., and Shaw Communications Inc.


Watch for China’s trade report. God knows, Mr. Trump will be.

Capital Economics expects it to be fairly balanced.

A good day for it, too, as it comes on the first day of the Summit of the Americas in Lima.

Also key today is the start of the U.S. bank earnings season, with Citigroup Inc., JPMorgan Chase & Co., PNC Financial Services Group Inc. and Wells Fargo & Co. all reporting.

“The banking sector has been hit by falling trading revenue,” said CMC’s Mr. Madden, noting declines in earnings from fixed income, currencies and commodities.

“In the latest reporting season the major U.S banks had one-off tax bills in relation to the new tax laws in the U.S., and now that is out of the way, we could see reduced tax bills,” he added.

“The recent interest rate hike by the Fed should assist the banking sector, as a higher interest rate environment helps lenders.”

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