MNI China Daily Summary: Thursday, April 22

MNI BRIEF: China To Quicken Resolving Local Debt Risks

RPT-MNI INTERVIEW: ECB's Wunsch Sees At Least Two Cuts By Dec

MNI BRIEF: Brazil CenBank Faces Greater Uncertainty - Campos

MNI: PBOC Conducts CNY2 Bln Via OMO Mon; Liquidity Unchanged

CHINA PBOC INJECTS CNY2 BILLION VIA 7-DAY REVERSE REPOS MON

EZ/UK T-Bill Calendar: 3/6-Month ATB Auction on Tuesday

EZ/UK Bond Supply Calendar: EU, FI Synds; IT, DE Auctions Tues

MNI: CANADA MAR INDUSTRIAL PRICES +0.8% MOM; EX-ENERGY +0.8%

RPT-MNI: Canada Sticks To Fiscal Anchors, Spends Chunk Of Windfall

MNI BRIEF: Poilievre Calls QE 'Scam' And Would Limit BOC Remit

MNI: Growth Drag From Net Zero Carbon Goal Can Be Offset-OECD

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BMO On The Potential For 10-20% House Price Correction

CANADA
  • BMO believe the housing market peaked in Q1 at a point that real home prices sat 38% above trend, the widest deviation in the past 40 years. Toronto tops the list with 41% above trend but with suburbs and exurbs up by more than 70%.
  • With mortgage rates rising, a 10-20% decline in prices would be needed just to maintain current (stretched) affordability on the assumption of mortgage rates rising from 1.5% to 4% and with steady income growth.
  • Similarly from a property investor perspective, cap rates moving from 3% to the 4-5% range (both higher GoCs and more normal spreads) could carve around 20% off the underlying asset price.
  • But the mortgage market should be able to contain the spillover: it’s helped by broad use of full-recourse mortgages and stress testing to insulate the financial system from a capacity-to-pay angle.
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