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Treasury
Affordability a Key Concern For Canada's Housing Market As Latest Existing Home Sales Data Awaited, notes BMO
The spring buying season provided little boost to Canada's "lacklustre" housing market in April, says Bank of Montreal, while noting that existing home sales data for April will be released on Thursday at 5 a.m. ET.Nationally, BMO expects sales to tick up from March, but to remain about 2% below year-ago levels. Average prices are expected to be little changed from year-ago levels, while the quality-adjusted MLS HPI could be down 4% year over year.Beyond the seasonal support, the market remains balanced, although regional differences persist, said the bank. Softness in Southern Ontario is a key outlier, while smaller-to-medium-sized cities in Quebec and Atlantic Canada remain tight, although less so over the past year, it addedAffordability is a key concern stopping the market from gaining meaningful traction, especially given elevated economic uncertainty, according to BMO.
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Treasury
BMO Will Be Looking For More Hawkish Signals From Bank of Canada's Summary of Deliberations Due Wednesday
The Bank of Canada's April 29 meeting revealed more than usual despite the as-expected hold on rates decision, says Bank of Montreal (BMO).Or, to be precise, Governor Tiff Macklem's statement did, adds the bank.BMO notes the governor highlighted scenarios in which rates could go lower -- for example, to support growth if United States tariffs increase further-- or higher, to combat inflation if oil prices remain elevated. However, the latter could come with "a need for consecutive increases" since the overnight rate is already at the bottom end of the BoC's neutral range.BMO will be looking through the Summary of Deliberations for more clues that point to this hawkish tilt when they are released at 1:30 p.m. ET on Wednesday.The bank judges that the BoC would need a few bad consumer price index reports to prompt a hike, and it's still a long way from that as BMO recalls momentum in core inflation has been disinflationary since late last year, while subdued demand could limit the pass-through of higher costs.For now, the bank continues to expect the BoC to remain on hold through 2026.
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Treasury
Scotiabank Sees a Gradual Improvement in Canada Auto Sales This Year, 2027 Amid Volatility
Canadian auto sales increased 3% month over month to 1.9 million units at a seasonally adjusted annualized rate (SAAR) in April, based on data from Omdia, Scotiabank noted in an overnight note.Last month's sales rate was the highest seasonally adjusted (SA) month since July 2025, while a 1% upward revision to Q1 sales provided a "stronger hand-off" going into Q2. In non-seasonally adjusted terms as reported by the same source, auto sales were 181,600 in April, down 4.1% year over year but up 7.9% relative to the same month in 2024, the bank also noted.Canadian auto sales have improved in recent months, with the three-month moving average (3mma) rising to 1.86 million SAAR in April, up from 1.76 million (SAAR, 3mma) in January, Scotia said. This rise is primarily supported by higher car sales, which increased 22% month-over-month SA in April amid a surge in demand for small cars, it added.It remains to be seen whether this is a temporary rebound from the softer sales at the end of last year or a more enduring rebound, the bank said. One possible explanation for the rise in car sales is increased demand owing to the recently implemented Electric Vehicle Affordability Program (EVAP), it added.Statistics Canada is expected to publish new vehicle sales by fuel type for March on Thursday, which could show early signs of an uptick in ZEV sales from the EV rebate program, noted Scotiabank.Scotia's outlook for Canadian light vehicle sales is 1.81 million this year. Auto sales remain quite volatile on a monthly basis, smoothing through this volatility, Scotiabank estimates demand to gradually improve throughout this year and next, rising to 1.87 million in 2027, although with larger uncertainty given elevated and volatile oil prices clouding the outlook.
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