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Daily Pulse


Plunging automobile sales add to evidence that higher borrowing costs are beginning to eat into Canadian economic growth, possibly faster than the central bank expected. Light vehicle sales dropped 9.4 percent in November from a year earlier, the most since 2009, according to a report Monday by DesRosiers Automotive Consultants Inc. Outside the financial crisis, the decline was the biggest since 2004. Meanwhile, Bank of Canada data show growth in residential mortgages decelerated to 1.38 percent in September on an annualized three-month basis, the weakest pace since 1982. The central bank has raised borrowing costs five times since July 2017. Policy makers are widely expected to leave the benchmark rate on hold Wednesday at 1.75 percent, however more hikes are predicted for next year.


Mortgage rates have now been falling for three straight weeks and that is reinvigorating the refinance business. It is not, however, bringing many more buyers back to today's very expensive housing market. Total mortgage application volume rose 2 percent last week compared with the previous week, according to the Mortgage Bankers Association's seasonally adjusted index. Volume was nearly 19 percent lower than the same week one year ago. Refinance activity drove the volume, increasing 6 percent for the week. Refinances are highly rate-sensitive week to week, as borrowers seek to save money on monthly payments. Volume was still 36 percent lower than a year ago, when interest rates were lower.


European stocks ended a choppy trading session broadly flat on Friday but managed to eke out a weekly gain despite mixed third-quarter earnings and while the budget row between Italy's populist government and the European Union heated up. The pan-European STOXX 600 dipped 0.06 percent to end the week with a 0.7 percent gain. Italy's bank stocks index .FTIT8300 sustained heavy losses in morning trading and fell to 22-month lows as government bonds were sold off after Brussels sent Rome a letter demanding an explanation for its budget plans. Italian banks gradually pared their losses and limited their daily retreat to 0.4 percent.


China swung into action to start delivering on the trade commitments that led to its weekend truce with the U.S., even as uncertainty over what was agreed lingers. Beijing will start to quickly implement specific items where there's consensus with the U.S. and will push forward on trade negotiations within the 90-day "timetable and road map," the Ministry of Commerce said in a statement on Wednesday morning in China. Hours later, Bloomberg News reported that officials have begun preparing to restart imports of U.S. soybeans and liquefied natural gas -- the first sign confirming the claims of President Donald Trump and the White House that China had agreed to start buying some U.S. products "immediately." In the afternoon, a Ministry of Foreign Affairs spokesman said China hopes to speed up talks and is devoted to finding a solution to settle issues.

The author

Michel Doucet

Michel Doucet

Vice-President and Portfolio Manager
After obtaining a Bachelor's degree from the Faculty of Social Sciences at the Université du Québec in Montréal and his Master’s degree, Michel Doucet began his career as a junior economist at the National Bank head office in Montreal. In 1992 he joined the institutional equities and fixed income group at Lévesque Beaubien Geoffrion as an economist and market analyst. Over the years, he has led various projects related to the North American and international economies as well as Canadian public finances. In 1996, the team of institutional economists to which he belongs was ranked first in Canada by Brendan Wood International. In August 1997, Mr. Doucet joined the personal services division of Lévesque Beaubien Geoffrion where he served as an economist, fixed income market analyst and vice president. In 2004, he joined the Desjardins Securities full service team as Vice President. He now occupies the roles of fixed income strategist, economist and portfolio manager. He manages the Securities Portfolio Advisory Group, advisor marketing and distribution of financial planning and insurance.