Canada housing starts up 21.6% in March to new record - CMHC - Reuters

By Julie Gordon

OTTAWA, April 19 (Reuters) - Canadian housing starts rose 21.6% in March compared with the previous month, easily beating expectations and hitting a new record, data from the Canadian Mortgage and Housing Corporation showed on Monday.

The seasonally adjusted annualized rate of housing starts rose to 335,200 units in March, well ahead of analyst expectations for 250,000 units, and a new high for all months on record. 

Much of the gain was on multiple urban starts, which jumped 33.8% to 222,358 units. Single-detached urban starts rose 3.6% to 78,615 units.

"The big acceleration came as weather was unseasonably warm in many parts of the country," Royce Mendes, senior economist at CIBC Economics, said in a note.

Mendes added that new home construction will likely be a major contributor to overall GDP growth again in 2021, even as building activity cools off from the "torrid pace" of recent months.

Canada's average home selling price soared an eye-watering 31.6% year-over-year in March, hitting a new high as sales also climbed to a new all-time record, the Canadian Real Estate Association (CREA) said earlier this month. (Full Story)

A supply imbalance has been blamed for skyrocketing home prices through the pandemic, though new listings surged in March, which, coupled with strong starts, suggests a more balanced market could be coming.

"Red-hot demand for real estate propelled a record month for housing starts in March. While the market will need a long stretch of supply growth to have a meaningful effect on prices, the March numbers are a solid start," said Shelly Kaushik, an economist with BMO Capital Markets in a note.

Canada's ruling Liberals are set to unveil their first full budget in two years on Monday, with billions in pandemic supports as COVID-19 infections skyrocket, a national daycare plan and new taxes on luxury goods.

Canadian dollar notches 1-month high ahead of federal budget - Reuters News

• Canadian dollar edges 0.1% higher against the greenback
• Loonie touches its strongest level since March 19 at 1.2471
• Price of U.S. oil falls 0.3%
• Canadian bond yields were mixed across the curve

By Fergal Smith

TORONTO, April 19 (Reuters) - The Canadian dollar strengthened to a one-month high against its U.S. counterpart on Monday, as the greenback broadly declined and ahead of a federal budget that is expected to spend big amid a fast-rising third wave of COVID-19 infections.

Canada will present a budget on Monday, at about 4 p.m. (2000 GMT), with billions of dollars for pandemic recovery measures, C$2 billion toward national childcare, and new taxes on luxury goods. (Full Story)

"This is going to be a serious budget that either sets the stage for post-pandemic policy in Canada, or has all the makings of an election platform, possibly to be used as soon as later this year," said Robert Kavcic, senior economist at BMO Capital Markets.

Wednesday's Bank of Canada interest rate decision will also be a focus for investors, with strategists expecting the central bank to announce it is cutting bond purchases from the current pace of C$4 billion per week. (Full Story)

The Canadian dollar CAD= was trading 0.1% higher at 1.2492 to the greenback, or 80.05 U.S. cents, having touched its strongest intraday level since March 19 at 1.2471.

The price of oil, one of Canada's major exports, eased amid concerns that rising coronavirus infections in India and other countries would dent fuel demand. U.S. crude CLc1 prices were down 0.3% at $62.97 a barrel. (Full Story)

The U.S. dollar .DXY fell to its lowest in nearly seven weeks against a basket of major currencies as the Federal Reserve's view that any spike in inflation was likely to be temporary weighed on Treasury yields. (Full Story)

Canadian government bond yields were mixed across the curve, with the 10-year CA10YT=RR down less than half a basis point at 1.537%.

Euro zone current account surplus narrows in Feb - Reuters News

FRANKFURT, April 19 (Reuters) - The euro zone's current account surplus narrowed in February on lower net exports of goods and services, European Central Bank data showed on Monday.

The bloc of 19 countries sharing the euro recorded a current account surplus of 25.9 billion euros in February, down from 34.7 billion euros in January, according to adjusted figures. 

Based on unadjusted data, the surplus widened to 13.3 billion euros from 5.6 billion euros.

In the 12 months to February, the current account surplus widened to 2.3% of the bloc's GDP from 2.2% in the preceding 12 month period.