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Inside the Market Experts disagree on plunge in Canadian housing market activity

A roundup of what The Globe and Mail's market strategist Scott Barlow is reading today on the Web

Economists at Bank of Montreal and RBC had significantly different interpretations of yesterday's report on a plunge in sales activity. BMO's Robert Kavcic sounded a "wait and see" tone,

"Canadian existing home sales slumped 14.5% in January from the prior month (seasonally adjusted), reversing five consecutive monthly increases to finish 2017. Note that sales rose a cumulative 11.3% in the final three months of the year as buyers pulled forward demand ahead of the new OSFI qualification rules (January 1st), so the latest decline is largely payback for that."

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RBC's view tilted more negative,

"It's too early to tell whether the new rules dampened homebuyer demand permanently or just displaced activity temporarily. We think it's both… perhaps even more noteworthy was the fact that new listings plummeted by 21.6% in January to an eight-year low… Fewer homes being put out for sale limit the kind of activity that can take place"

"@SBarlow_ROB Everybody take a deep breath on those Canadian existing home sales numbers (from BMO), " – (research excerpt) Twitter

"@SBarlow_ROB RBC on Canadian housing: " too early to tell whether the new rules dampened homebuyer demand permanently or just displaced activity temporarily. We think it's both. " – (research excerpt) Twitter

"An Englishman's Home Is an Unreliable Pension Plan" – Business Week


Reuters notes that "Global stocks set for best week in six years" but there are rumblings of instability in global credit markets that are concerning institutional portfolio managers,

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"Investors pulled $14.1 billion from debt funds, the fifth-largest stretch of redemptions in the week through Feb. 14, according to a Bank of America Merrill Lynch report, citing EPFR data. High-yield bonds lost $10.9 billion alone, the second highest outflow on record… "Investors don't sell their cash bonds in a big way until they are forced to, which happens when the outflows start picking up more sustainably," Morgan Stanley strategists led by Adam Richmond wrote in a recent note to clients."

"Selloff Grips Credit Funds as Rate Fears Take Hold in Market" – Bloomberg

"U.S. 'junk' bond funds hit by second biggest cash withdrawals: Lipper" – Reuters

"Global stocks set for best week in six years, dollar sags" – Reuters

See also: "Rising Yields Are Hurting One of 2017's Top Portfolio Blueprints" – Bloomberg


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Bitcoin miners are moving to Quebec to take advantage of cheaper electric power,

"[Hydro Quebec] Spokesman Marc-Antoine Pouliot said more than 100 cryptocurrency companies have expressed interest in coming to Quebec to take advantage of the province's rock-bottom energy prices.

"We've had such an important volume (of requests) that there are questions being asked on the tariff offered and the quantity of clients we'll be able to plug in," he said in a phone interview."

"Hydro-Quebec considers special rates for Bitcoin miners as demand surges" – CTV News

"Is Bitcoin a Waste of Resources?" – Federal Reserve Bank of St Louis


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Tweet of the day: "@PlattsOil #Oil market forecasters diverge on 2018 supply, demand growth. @eklavyagupte & Jack Jordan report: #OOTT #OPEC #EIA #IEA " – (table) Twitter

Diversion: "These 7 cities have the worst traffic in the world" – Business Insider

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