Daily Financial update February 8th 2010

It’s been a bit of a rollercoaster over the last 7 trading days. Markets opened lower this morning, but have been rallying ever since and are now pushing into positive territory. Economic and earnings reports have been largely encouraging, and mostly ignored, over the last week as mounting concerns over sovereign debt issues in Greece, Italy, Spain and Portugal take centre stage. Finance ministers from the G7 met over the weekend, pledging to keep the stimulus taps open and receiving assurances from the ECB that Europe’s debt problems would be managed.. The unemployment rate in the US ticked down to 9.7%, while Canada continues to add positions and has now retraced about a third of the jobs lost during the recession. Economic data will be light this week, but Canadian earnings season is getting into full swing with heavyweights such as Agrium, Teck Resources and Manulife among the expected reports. The TSX is up 44 pts. The Dow is up 10 pts.

Volatility in the Canadian dollar has been rather muted compared to the swings in equity markets, and is unchanged this morning at US$.9345. Bonds have also ignored most of the turmoil with the 5-year Canada yield rising over the week to 2.43% and the 10-year to 3.37%. Oil is up 50 cents to US$71.68/barrel. Gold is up $15 to US$1067.80/oz.

We saw mortgage interest rates in Canada drop a bit last week. Most lenders now have their five year fixed term mortgages set at between 3.74% and 3.99%. And Merix Financial is offering a quick close options at 3.69%.

Variable rates remain in the prime minus .1% to prime minus .3% range. This is for the closed variable rates.

If you have any questions about your Vancouver mortgage please call me, Lawrie Thom at 604-961-2400.

Daily financial update January 27th 2010

North American markets declined shortly after the open as data on new home sales in the US was lower than expected, and ahead of the Fed’s policy announcement due later this morning. No move in interest rates is expected, and considering the Senate is set to vote tomorrow to decide whether or not Bernanke receives a second term as Fed Chair, it’s unlikely that anything in the announcement will even slightly rock the boat. President Obama will deliver his State of the Union Address at 6pm this evening. Profit reports have been largely positive with companies such as Johnson & Johnson, United Technologies and Caterpillar delivering higher than expected numbers, although the revenue rebound remains sluggish. The TSX is down 36 pts. The Dow is down 29 pts.

The Canadian dollar is down 35 bps to US$.9379 as the rush into US dollars continues. The yield on the one-month US T-Bill is actually negative this morning due to the surge in demand and reduced supply as the Treasury Dept. tries to force money into longer dated issues. Bond yields have come off in Canada to 2.39% for the 5-year bond and 3.30% for the ten. Gold is down $5.30 to US$1093/oz. Oil is flat at US$74.77/barrel.

The drop in the bond rates is good for anyone looking for a Vancouver mortgage. If bond yields continue to drop or at least remain at these levels there will be less pressure for mortgage interest rates to go up in the short term. In the long term mortgage rates in Canada are still likely to be higher at the end of 2010 than they are now.

Daily financial update January 21, 2010

Markets rallied throughout the balance of yesterday’s trading, but are selling off again this morning due to the strong economic figures from China. The Chinese economy expanded at a 10.7% clip in the fourth quarter, beating average estimates and pulling the full year figure solidly above the administrations own targets. This has traders worried about further monetary tightening and its effect on demand for raw materials, which is weighing heavily on commodity related sectors this morning. Earnings reports were largely positive, with EBay, Starbucks and Xerox beating average estimates. The index of US leading economic indicators also increased more than expected in December, suggesting the US economy will keep growing at least through the first half of this year. Unemployment claims climbed last week which likely reflected a backlog from the holiday season. The TSX is down 135 pts. The Dow is down 165 pts.

The Loonie is under pressure as the greenback rallies, down a quarter cent to US$.9525 this morning. Bond yields are relatively steady with the 5-year Canada yielding 2.52% and the 10-year 3.40%. Oil is off $1.35 to US$76.40/barrel. Gold is down $20.50 to US$1092/oz.

Vancouver mortgage rates remain steady with no changes at this time.  The long term trend for mortgage rates in Canada is for rates to increase in 2010.

Daily financial update January15, 2010

Markets opened lower this morning amid mixed profit reports and increasing concern over Greece’s debt problems. JP Morgan profit quadrupled on higher investment-banking revenue, however missed revenue estimates due to a loss at it’s retail banking division. European Central Bank president Trichet commented that Europe is facing major debt problem, but that no single nation would receive any special treatment. This has led to renewed concerns over Greece’s debt as the country attempts to restructure its finances. Both the Dow and TSX are down 108 pts.

The Loonie is paring recent gains as risk is taken off the table and ploughed into greenbacks. The C$ is off 44 bps to US$.9727 this morning. Bond yields are also lower, with the 5-year Canada down to 2.62% and the 10-year to 3.50%. Gold is down $11.90 to US$1131.10/oz. Oil is off 83 cents to US$78.55/barrel.

There are a couple of rates specials that were announced yesterday. One is a closed variable that is being offered at prime minus .3% which works out to 1.95%. The other option was a five year fixed term at 3.75%. Please call if you would like to get the details. You can each me at 604-961-2400 or through my wensite at www.bestmortgagesvancouver.com

Daily financial update January 14, 2010

North American markets opened higher this morning, but have steadily been running out of steam since the bell. Retail sales in the US declined in December when the market was expecting a slight gain. US initial jobless claims rose slightly last week, as expected, while the four week average declined to the lowest level since August 2008. Technology shares are quite strong this morning after business-management software manufacturer SAP said sales and margins beat estimates. Microsoft and Oracle are rising in sympathy, while Intel is up ahead of their quarterly results due after the close. The TSX is down 64 pts. The Dow is up just 8 pts.

The Canadian dollar is on an absolute tear, up another 35 bps this morning to US$.9738. Part of the reason is that commodity currencies are rising in tandem with the Aussie dollar, after a report showed employment in the country climbed by 35,000 last month, raising the likelihood of another interest rate hike by the RBA next month. Bond yields climbed across the curve for the same reason, with the 5-year Canada yielding 2.71% and the 10-year 3.58%. Gold is down $3.70 to US$1133.10/oz. Oil is down 43 cents to US$79.22/barrel.

Mortgage rates are holding steady at this time althought there is a bigger spread in the five year fixed terms. Currently the range for a five year fixed term is between 3.74% and 4.29%.  It is still expected that Vancouver mortgage rates wil go up this year so if you are thinking about buying a home it would be a good idea to secure an interest rate hold and keep it in place just in case rates do go up. The rate hold is good for 120 days and you can always extend it out further at the rate at that time.

Daily financial update January 12, 2010

North American markets are taking a step back this morning after Alcoa missed estimates and China moved again to reign in economic stimulus. Alcoa reported higher than expected revenue in the fourth quarter of 2009, however still posted a slight loss when the market was expecting a return to profitability. After raising their 3-month interest rate last week, China moved again by raising reserve requirements for banks as they try to stem the tide of borrowing. This is weighing heavily on commodity prices this morning. Canada posted an unexpected trade deficit in November as imports rose faster than exports, highlighting the effects of a strong Loonie. The TSX is down 66 pts. The Dow is down 34 pts.

The Canadian dollar declined after the trade data was released, however is on the rise again to just a 25 bps loss on the day at US$.9651. Bond yields declined on the news, with the 5-year Canada yield down to 2.67% and the 10-year to 3.56%. Oil is off $1.06 to US$81.46/barrel. Gold is down $3 to US$1148.40/oz.

The bond yeilds are good news for perople looking to renew their Vancouver mortgage soon. If the bond yields continue to drop or at least stay where they are it will allow the lenders to not have to increase mortgage interest rates.

Daily financial update January 11, 2010

North American markets rallied out of the gate this morning, pushing the TSX over the 12,000 mark for the first time September 2008, but have settled back as inevitable profit taking takes centre stage after a week-long run-up. News that Chinese imports climbed to an all-time high in December stoked the already red hot fire under commodities, lifting shares such as Agrium and Teck Resources to new 52-week highs. Canadian housing starts rose in December for the third consecutive month, which should provide a boost to Q4 GDP numbers. Alcoa kicks off earnings season after the bell today with majors such as Intel and JP Morgan also on tap this week. Analysts are expecting a sharp increase in fourth quarter profits. The TSX is up 13 pts. The Dow is down 5 pts. The Canadian dollar is off slightly to US$.9687 even as most commodity prices jump. Bond yields declined a touch to 2.69% for the 5-year Canada and 3.60% for the ten. Oil rose to a 15-month high this morning, but has settled back to US$82.39/barrel. Gold is up $15.40 to US$1154.30/oz

Daily financial update January 8, 2010

It’s a mixed bag out there this morning with no sector providing any clear direction. The much anticipated employment report was a bit of a disappointment as the US economy shed 85,000 jobs last month, although the November figure was revised to a slight gain, the first in two years. Canada also disappointed with a loss of 2,600 positions, although this is just a fraction of the 79,000 jobs gained in the prior month. The rails are strong this morning after an analyst upgrade at UBS. US indexes are slightly lower with the S&P500 poised to end its four day winning streak (that would be every day this year). The Dow is off 24 pts. The TSX is up 22 pts and has climbed 1.5% in the first week of 2010.

The Loonie is flat this morning at US$.9655. The five year Canada bond yield declined 3 bps to 2.72% while the ten year is unchanged at 3.62%. Gold is off $6 to US$1127.70/oz. Oil is down 33 cents to US$82.33/barrel.

Vancouver mortgage rates remain steady with the five year fixed term mortgages in the 3.79%  to 4.39% range.  The variable rates are in the prime to prime minus .25% range which puts the current variable rate at 2% to 2.25% range.

Daily financial update January 7, 2010

Most equity markets fell overnight after the Chinese central bank raised the interest rate on its benchmark 3-month bill as it tries to reign in lending and control inflation. Commodities declined on the news due to prospects for lower demand, although tighter policy in China would only occur if the authorities believed their annual economic growth targets would remain achievable. Initial jobless claims in the US were basically flat from last week, and slightly lower than forecast. The Labour Dept. is expected to release December’s monthly data tomorrow, with pundits starting to forecast that we could see a net increase in employment for the first time in two years. The TSX is down 78 pts. The Dow is up 4 pts.

The Loonie remains relatively strong despite the near universal weakness in commodities this morning, down just 20 bps to US$.9665. Bonds are unchanged with the 5-year Canada yielding 2.75% and the 10-year 3.62%. Oil appears set to snap a 10-day winning streak on the news from China and an unexpected build in US crude supplies, although crude is trading down just 26 cents to US$82.92/barrel. Gold is down $6 to US$1130.40/oz.

If bonds remain steady there may be less of a push from the lenders to increase interest rates further. As I mentioned previously some lenders did increase  the rates on their five year fixed term mortgages but many lenders and in particular the banks and credit unions did not increase their interest rates.

This break may be short termed and the long term trend for mortgage interest rates in 2010 wil be for mortgage interest rates to go up.

If you have a Vancouver mortgage that will be coming up for renewal soon I would recommend you get a rate hold set up now with someone just in case rates go up and your current lender is not prepared to match this rate. If you would like us to set up that rate hold just complete an application on my website at http://www.bestmortgagesvancouver.com/

Daily financial update January 6, 2010

After closing at a new 52 week high yesterday, the TSX index continues to forge ahead this morning amid near universal strength in the mining sector. Gold has found some solid footing after a steep drop to finish ’09, while metals such as copper and zinc have advanced to new multi-month highs. The ISM Services Index poked its head just barely above 50 in December, being the dividing line between expansion and contraction, while the ADP employment report showed the smallest decline of positions in the US in almost two years. Blackberry Maker RIM has lost a bit of ground this morning after Google introduced a new smart phone. The TSX is up 44 pts. The Dow is up 17 pts.

The Canadian dollar is also strong as commodities rise, up over half a cent this morning to US$.9680. Bond yields ticked higher on the US data, with the 5-year Canada yield up to 2.76% and the 10-year to 3.62%. Oil is up $1.20 to US$82.97, marking its highest intra-day level in almost 15 months. Gold is up $18 to US$1136.70/oz.

If you are looking for a Vancouver mortgage I currently have one lender offering a special on a five year fixed term mortgage. You can get a five year fixed term for 3.79%. This is not available for all mortgages. I order to get this rate the mortgage must be CMHC insured and the motgage must fund within 30 days of the application being submitted.

This offer makes sense for those that are lookng to either refinance or renew their Vancouver mortgage in the next month.

If you have any questions about this mortgage please give me a call at 604-961-2400.

Lawrie Thom