• With only a few economic releases on tap, sovereign debt issues stepped back into the spotlight this week. In Europe, mounting speculation that Greece will have to announce a restructuring of its sovereign debt, sent the yield on 2-year Greek notes north of 22.0%. Stateside, Standard & Poors, for the first time, placed their U.S. triple-A credit rating on negative watch.
• Debt restructuring in Greece will alleviate immediate fiscal hurtles, but it will not eliminate the need for continued fiscal adjustment and structural reforms.
• In the U.S., the S&P’s shot across the bow may be the catalyst get policymakers off the sidelines and focus their attention on reaching some degree of agreement on how to address the nation’s long run fiscal challenges.
• Investors continued to acquire the Canadian dollar in droves this week, bidding up the loonie to a fresh three-and-a half year high of 1.05 US dollars.
• All major drivers lined up in favour of currency strength, including U.S. dollar weakness, commodity prices and Canadian economic data releases, which caused markets to consider an earlier rate hike by the Bank of Canada. Still, for the most part, the loonie’s climb continued to be largely a story of stronger Canadian fundamentals.
• Looking ahead, while the factors that have recently been strengthening the currency should remain supportive, we don’t expect another significant leg up.
I strongly belive we will see a slight point in the real estate and mortgage market once the elections are over next week. So let’s wait and see and go from there.
As for now my firm has some great offers for mortgage financing: 3 year fixed 3.35%…5 year fixed 3.95%…and a fabulous variable for Prime -.95 = 2.05%.