Lowest spread on a new Canada Housing issue since June 2007

Financial Post- Canada Housing Trust, the financing arm of the nation’s housing agency, is poised to sell $6-billion (US$5.9-billion) in mortgage bonds at the lowest relative yields since before the credit markets seized up in 2007.

Canada Housing said Wednesday it will sell five-year, 2.5% bonds maturing in March 2015. The debt may price about 18 basis points above Canada’s 2.5% bonds maturing in June 2015. That would be the lowest spread on a new Canada Housing issue since June 2007, when the agency paid a spread of 14 basis points. Since then, spreads have ranged from 21 to 65.5 basis points.

Borrowing costs are falling to levels last seen in the second half of 2007 when the global credit crisis began. The Bank of Canada has pledged to leave its key overnight rate at a record low 0.25% through June unless the inflation outlook shifts…

Lowest spread on a new Canada Housing issue since June 2007

Canadian economy grows 5%, tops forecasts

Globe and Mail- The Canadian economy expanded by a greater-than-expected 5 per cent in the fourth quarter, raising the likelihood of interest rate hikes later this year.

The country’s gross domestic product grew at the fastest annualized pace since the third quarter of 2000, Statistics Canada said Monday.

The economy’s burst boosts the odds of a string of rate hikes in the second half of the year. The Bank of Canada announces its interest-rate decision tomorrow, and while rates are on hold for now, the tone of the announcement could well acknowledge that growth is picking up speed at a faster pace than anticipated.

“This report shouts strength, and increases the odds the Bank of Canada will begin to hike interest rates in July and stay on that path in the following decisions,” said Douglas Porter, deputy chief economist at Bank of Montreal…

Canadian economy grows 5%, tops forecasts – The Globe and Mail

Week Ahead: Bank of Canada likely to hold rate

Times Colonist- Interest rates and inflation are among the principle subjects of the coming week’s Canadian economic news.

On Tuesday, the Bank of Canada is scheduled to issue as decision on interest rates. It’s expected to keep the overnight interest rate at a historically low 0.25% and restating the commitment to keep it that way until — at earliest — the second half of this year.

When the bank put interest rates this low in April last year in an effort to ward off a frightening economic downturn, it said the rates would remain at that level until the end of 2010’s second quarter, barring any unexpected rise in the inflation threat…

Week Ahead: Bank of Canada likely to hold rate

Canada’s hot housing market to continue through mid-2010

Montreal Gazette- "The Canadian real estate market enters 2010 with considerable momentum from an unusually strong finish to the previous year," Phil Soper, president and chief executive of Royal LePage Real Estate Services, wrote in a statement. "The stimulus effect of low borrowing costs has contributed to a sharp rise in demand that has driven activity levels to new highs. This demand, coupled with a typical seasonal undersupply of homes for sale, should cause home prices to continue to appreciate significantly during the early months of the year."

He said improving supply in late 2010 and easing demand as the cost of home ownership rises on higher interest rates should temper home price increases in the second half of 2010…

Canada’s hot housing market to continue through mid-2010

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