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Email this9:55 am
January 10, 2018
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http://business.financialpost......-this-year
..Financial Post article ...Reuters.. February 28, 2018
Since July 2017 Bank of Canada has raised rates 3 times ( 0.50% > 1.25%)
Forecast for 2018
1Q ..............1.25%
2Q 0.25% .. 1.50%
4Q 0.25% ... 1.75%
Markets see an 80 per cent probability the Bank of Canada will raise rates in May, while a hike is fully priced in for July.
Forecast for 2019
1Q 0.25% ... 2.0%
I thought this was a good article explaining the current outlook. It will be interesting to see how events ( new housing regulations, NAFTA, etc. ) will impact this forecast.
7:15 pm
October 21, 2013
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Don't forget impact of US mid-term elections coming up.
9:29 pm
March 11, 2018
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There seems to be lots of reasons now not to raise. I wonder if the Q2 raise is off the table now.
10:33 pm
December 12, 2009
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Yep, apparently, the U.S. Federal Reserve is going to raise rates but, thanks to macro prudential regulatory changes vis-a-vis housing in Canada that have slowed Canada's economy, the BoC finally won't be able to match the U.S. Fed. I expect Canadian dollar to weaken as BoC holds while Fed raises. 🙂
Cheers,
Doug
12:47 am
December 17, 2016
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Doug said
I expect Canadian dollar to weaken as BoC holds while Fed raises. Â
I'm feeling that squeeze right now in Europe, where the exchange rate is currently coming back at me at
$1.6545 = €1.00
When I was last in Europe, in November 2017, the average exchange rate for the month-long trip was
$1.5330 = €1.00
2:09 am
February 27, 2018
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I have already expressed my views on where i believe our rates are going, into the negatives. Our dollar will fall below 60 cents US.
NAFTA.
When ontario has to pays the americans to take our hydro and we sell a lake full of water to Nestles for $5, and Alberta sells their oil to the american refineries for $30 off the global price, AND our fearless leaders believe... "these are great deals". I hold out little hope for the 51st state.
Sorry, my glass is always 1/2 empty
9:03 am
February 24, 2018
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Have to agree with the views here. Poloz seems to like where expansion & inflation are heading right now and may be inclined to hold on rates for some time. A 2018 rate hike in the first half of this year now appears unlikely, continuing to weaken the dollar.
Housing and Canadian debt levels will be factors heading into Q2.
http://www.cbc.ca/news/busines.....-1.4574167
Regards,
9:38 am
February 27, 2018
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http://www.cbc.ca/beta/news/bu.....-1.4577306
Parsimonious, i am reposting your web link to cbc. Good article
10:48 am
October 21, 2013
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If the dollar goes down further, how will he deal with inflation?
I suppose he's got some wiggle room on that, but they're committed to controlling that too, as I understand it. They don't want a repeat of 1970s.
3:54 pm
March 11, 2018
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Do we believe this is near the high water mark for rates for the time being? Is anyone jumping at 3% rates for 4 and 5 years?
5:15 pm
January 10, 2018
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Pipersierra said
Do we believe this is near the high water mark for rates for the time being? Is anyone jumping at 3% rates for 4 and 5 years? Â
I think it is worth considering starting to build a 4 or 5 year ladder with:
Hubert 3.25% for 4 years, Oaken 3.25% for 5 years, EQ Bank 3.26% for 5 years...
{Only go with the rate leaders ... to maximize your bet ! }
or
Short term .. 2.75% for 1 year, 3.1% for 2 years Oaken
or
Chasing the short term 2.5..3.0 ... 4.0 saving account special offers and switching multiple times during the year...
If I really knew .. do you really think I would be typing this reply and shoveling snow a couple of weeks ago ..... Nope ! I would be sailing my yacht in the Caribbean 
regards,
Wayno
5:51 pm
December 12, 2009
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Kidd said
I have already expressed my views on where i believe our rates are going, into the negatives. Our dollar will fall below 60 cents US.NAFTA.
When ontario has to pays the americans to take our hydro and we sell a lake full of water to Nestles for $5, and Alberta sells their oil to the american refineries for $30 off the global price, AND our fearless leaders believe... "these are great deals". I hold out little hope for the 51st state.
Sorry, my glass is always 1/2 empty Â
LOL, I've been saying that I see CAD going to $0.60 USD for several years now. That's about 15-20 cents down from this point in time. I'm not sure it'll get there, but I think below 70 cents USD is likely. 🙂
Cheers,
Doug
10:01 pm
January 10, 2018
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Doug said
LOL, I've been saying that I see CAD going to $0.60 USD for several years now. That's about 15-20 cents down from this point in time. I'm not sure it'll get there, but I think below 70 cents USD is likely. 🙂
Cheers,
Doug Â
My original post concerned the bank of Canada rate increases since it has a direct correlation to rising interest rates...
I am confused by the comments and projections of future Canadian currency rates.
...Perhaps the ORIGINAL POSTERS can please explain the direct correlation to BOC interest rates ?
.. and what is the evidence to back the CDN currency projections ?
I would like to better understand this !
Thanks,
Wayno
1:06 am
February 27, 2018
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Wayno.
In an effort to keep the Canadian economy moving forward, BOC artificially kept the interest rates too low, for too long. Yes, a particular sector of people were borrowing and spending but the end result was... a massive amount of debt. The average Canadian now carries $1,70 debt for every $1 of net pay. The word "average" makes this problem sound manageable, i have zero debt. So someone's debt is more than $1.70. Let's call this a debt bubble.
If interest rates go up... the defaults on debt repayment go up. Others will buy our currency for the higher % return, making our currency in demand, so the value of our dollar goes up. So much of our economic growth is dependent on a low dollar, tourism, foreign investment, trade. If an American can buy everything here (including real estate at a 30% discount... hmm?). This is why a foreign tax charge was needed on housing. Higher intetest rates also mean, money comes out of the stock market, if i can get a gic at 5% or 6%... why risk my money on a gamble with stocks? Higher interest rates are used to slow inflation, used to slow a heated economy. If rates go too high, the economy will STALL.
Does canada have a heated economy, NO. Do we have inflation, YES. BUT our inflation is government created. Public sector vs private sector. Anything and everyone on the government side of the ledger has been allowed to increase their rates, while others (private sector) have had to look for efficiencies to maintain costs and prices. Rogers is going up because the crtc approved a rate increase. Hydro is going up because the energy board approved an increase. All government regulatory boards, are freely passing out rate and fee increases. WHY can't they just say... NO. This is our inflation. Example... gas for your car. The ratio used to be ballpark 100 to 1. Oil to pump price. Oil $135 a barrel, gas $1.45 a litre. When the price of oil dropped, we lost that correlation. This is government greed and artificial inflation.
If interest rates go down. The Canadian dollar will drop, those struggling to repay their debt "may" continue to make the minimum payments BUT all the borrowing has been done. Canada still STALLS.
Interest rates go negative (which i believe may happen). There are trillions of dollars in savings and this is an untapped resource. If.... you are being charged to save money.... you look elsewhere for a return. Our dollar will have dropped by this point, so buying other safer currencies is not a real option. The stock market is the choice most will make, others will look at bonds. This helps the economy. Some will try to withdrawal all of their money and sit on cash at home. I found it interesting that canada cancelled the $500 and $1,000 note just a couple of weeks ago.
Okay... savings rates seem to be going up right now at all the banks. Why? Financial institutions will only increase their savings rates when THEY need cash, they are only out to make profit. Sometimes a FI will need a few billion to buy something, like maybe a competitor. They will offer a higher rate for a limited amount of time, until they get the cash needed. Right now every FI seems to want cash though, i think it's to help their bottom line. They are carrying a lot of debt, credit card, auto, mortgage, debt that they fear will not be repaid.
This is my twisted view at 4am. I have supplied web links in my other posts to support my theory.
4:13 pm
September 11, 2013
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Kidd, that's a pretty darn good overview for 4:00 a.m. Your private vs public sector inflation point is particularly on, and this trend will only grow as in most of the country Canadians are regularly (and apparently happily) being led to elect public sector-friendly and private sector-unfriendly politicians and parties. But at least understanding the trends makes it a lot easier to figure out how best to invest and personally profit from what's going on.
7:09 pm
October 21, 2013
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Since when is Rogers part of the public sector? or Bell? Enbridge? or even Hydro in Ontario now that it's being sold off?
The price increases are being awarded in both public and private sectors. In the case of private corporations, the initiative comes from them. Evidently they feel it's essential to increase their rates, in order to....?
In order to fully assess the role of CRTC in granting increases, one would also need to look at how much the corporations in question applied for versus what was granted in various applications over a significant period oftime. My recollection is that sometimes the corporations have asked for even more, so that CRTC actually functions to limit the increases.
1:45 am
February 27, 2018
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https://www.thestar.com/business/2014/03/27/enbridge_gets_hefty_interim_rate_increase.html
https://globalnews.ca/news/3962214/auto-insurance-rates-in-ontario-2017/
Ontario pays the highest car insurance rates in North America only because the Ontario government approves it. The car insurance industry complain about fraud, yet they never have to worry about it or address this problem because they know the government will approve an increase to our price. To address the fraud would be an efficiency. A "private sector" efficiency.
Bell and Rogers charge the highest rates in the WORLD only because the government approves rate increases. They cry poor, yet they have the money to buy professional sport team franchises. For the highest rate, i would expect the best service. "private sector" efficiency would fix this. Bell and Rogers should have to fight for your dollar. Better service, lower prices.
Though, these companies are technically in the "private" sector... it is the "public" sector (government) which dictates what they charge.
The ceo of ontario's hydro one makes $4 million per year. The person doing the same job at Quebec hydro makes $400,000. Believe it or not... this reflects on what you pay each month. "private sector" efficiency would fix this, the board of directors would kick out ontario's ceo.
If the "public" sector had the balls to say "NO" to these rate increases. These companies would be forced to act like real "private" sector companies.
The top link about enbridge... it is a few years old. If i remember correctly. Enbridge asked for a 40% increase but only expected and really only wanted a 20% increase. They received the full 40%.
These are examples of government created inflation. We pay the most because it is all government approved.
5:11 am
December 17, 2016
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Posts #15 and #17, above, are just so bang on the money.
6:37 am
October 22, 2015
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Top It Up said
Posts #15 and #17, above, are just so bang on the money. Â
Heartily agreed!
8:32 am
October 21, 2013
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it's difficult to compare car insurance rates across the country because the minimum levels of coverage are different, as are the claims costs.
BC has a much bigger government hand in regulating car insurance than Ontario does, but, according to you, it's better because it's cheaper than Ontario with its system of oversight. Even then, we find different rates in Ontario among different insurers for the exact same insurance, and we can shop around, and competition is alive and well.
Ontario Hydro and Quebec Hydro are quite different operations. Ontario Hydro, which you say pays 4million to its CEO, is now partially private and partially public. Quebec Hydro is totally publicly owned and has been since the 1940s, and you say it pays its CEO only 400K. It pays dividends to the government of Quebec. There's been a lot of rot and scandal at Ontario Hydro for a very long time, through more than one government, and it can't be covered fairly here. Certainly, hydro rates are a lot cheaper in QC, but they have a surplus of hydro generation whereas Ontario is maintaining nuclear reactors.
According to wikipedia, the CRTC no longer regulates cable rates, does not directly regulate internet rates, and does not regulate cell phone rates. If the rates are exhorbitant, you might do well to blame the company that sends you the bill, owns sports teams, sponsors charities, has buildings named after itself, and pays reliable dividends to stockholders. The Wikipedia article on the CRTC makes it clear that they've been getting out of the rate regulation business.
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