/Posthaste: Stimulus is in the air, China’s exports crash and Canadians confess to lying on their mortgage applications

Posthaste: Stimulus is in the air, China’s exports crash and Canadians confess to lying on their mortgage applications

Good morning!

Unless the Tweet-in-Chief has something else planned, the biggest macro event of the week will be the European Central Bank’s meeting on Thursday that’s expected to result in significant stimulus. Much is at stake with Mario Draghi, president of the ECB, heading his second last meeting before Christine Lagarde takes over.

“Will Draghi be able to twist enough arms on the Governing Council, given opposition to major stimulus from Germany, the Netherlands and France? Is the ECB technically prepared to roll out multiple forms of stimulus and along what time line?,” ask Scotiabank analysts.

Stimulus is in the air after China’s central bank said over the weekend that it was cutting the amount of cash banks must hold as reserves for the third time this year, releasing US$126.19 billion in liquidity to boost the economy and flagging exports.

Despite the low interest rates, surging Canadian housing prices is making some commit fraud, according to Equifax Canada.

Millennials are more likely to lie about their annual income compared to the rest of the general population in efforts to secure a mortgage, according to a new survey by Equifax Canada out this morning.

Almost a fifth, or 19 per cent, of millennials surveyed indicated they had not been entirely truthful on a credit or loan application vs. 12 per cent of the national average, the survey revealed. Or could it be they are just more truthful about their little white lies?

“It’s concerning that so many younger adults we surveyed believe it’s OK to inflate their income to purchase the home they want,” said Julie Kuzmic, director of consumer advocacy at Equifax Canada. “Fudging income numbers when completing a mortgage application is fraud. It also becomes a slippery slope for these people who may end up stretching themselves too thin.

But those dreaming of a new home may be forced to lie given the outrageous average prices of homes in major cities like Toronto surpassing $800,000.

The Equifax survey shows 69 per cent of respondents who are planning to get a mortgage believe foreign investors are distorting the market.

“Slightly less than half of consumers surveyed, or 48 per cent, say the government should relax the mortgage stress test for those buying for the first time,” the survey noted.

Here’s what’s you need to know this morning:


  • Barclays’s annual Global Financial Services Conference in New York
  • Assembly of First Nations National Chief Perry Bellegarde publicly releases “Honouring Promises: 2019 Federal Election Priorities for First Nations and Canada” report
  • Foreign Affairs Minister Chrystia Freeland makes an announcement about helping Canadians get the skills and training they need to succeed in a changing economy in Oldcastle, Ont.
  • Union and First Nation leaders speak at a news conference to outline the “unfolding disaster” in the salmon fishing industry in New Minister, B.C.
  • Rail-Volution conference with speakers from TransLink, Uber, Lyft and Hyperloop One in Vancouver

Banish thoughts of gloom. The Canadian job market is set to crate nearly half a billion jobs this year, according to one analyst.
Last week’s stellar jobs report showed 81,000 new jobs created.

Canada has already created 304,400 jobs year-to-date, which, “proportionately blows the U.S. job market out of the water,” says Scotiabank.

“If this average pace keeps up over the remaining months, Canada is on track to create about 450,000 new jobs this year,” the bank noted.

But it may not be enough to keep the hawks at bay, and the Bank of Canada may still be forced to follow its global counterparts on interest rates.

“Because the Canadian economy is so closely tied to U.S. developments, rare has been the day that the BoC has carved a truly independent path from the Fed,” BMO Capital Market’s Douglas Porter said in a note to clients.

Send your news, comments and stories to [email protected] — Yadullah Hussain @YAD_FPEnergy

With files from The Canadian Press, Thomson Reuters and Bloomberg



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