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Macro week ahead: Halifax housing health check, Canada's rate call the focus

Published 02/06/2023, 12:18
© Reuters.  Macro week ahead: Halifax housing health check, Canada's rate call the focus

Proactive Investors - A quieter week of economic releases will see the focus on an update on the health of the UK’s housing market from Halifax, while the Bank of Canada will announce its latest monetary policy decision on Wednesday.

The Halifax will release its health check of the UK housing market on Wednesday after industry rival Nationwide reported a drop in house prices this week.

Nationwide reported that the average price of houses sold in May were 3.4% lower than a year ago, down from the 2.7% fall recorded in April.

In May, prices slipped by 0.1% on a seasonally-adjusted basis, partly reversing April’s surprise 0.4% rise.

But “headwinds to the housing market look set to strengthen in the near term,” said Robert Gardner, Nationwide's chief economist.

Those headwinds include rising mortgage rates which are likely to cause further pain to homeowners, with a huge number – estimated by some at 2.5mln – of fixed rate mortgages are due for renewal in 2023.

In April, Halifax said prices declined 0.3% which partially offset the 0.8% increase in the previous month.

Over in Canada, the consensus is for no change in interest rates, but after stronger than expected consumer price inflation and GDP and with the labour data remaining robust the market is pricing a 25% chance of a hike with a 25bp hike fully discounted by the 6 September policy meeting.

ING Economics said it favoured “a hawkish hold, signalling that unless there is evidence of softening in price pressures very soon, they could raise rates again in July.”

Elsewhere, a slew of PMI updates will be reported, updating on previous ‘flash’ estimates.

In the US, there is a lull in significant economic releases ahead of inflation figures the week after.

Read more on Proactive Investors UK

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