Canada's economy can soon understand what it doesn't have in 68 years: A recess without the Union in the same boat.
That's the view of Jim Mylonas, global macro strategist at BCA Research Inc. in Montreal, a company that has been calling for coins and economies since 1949. Mylonas says it is complicated in household debt in combination with emerging numbers in the Canadian economy in resection, even while the US economy is continuing to grow.
"I think we're just at the depth of" the beginning of a serious recess, "Mylonas said in an interview from Bloomberg's Toronto office. "It's not a matter of if, but when & # 39; t."
For Mylonas, the irony is that this surprisingly strong growth of the United States this year can reach Canada at & # 39; a border. The expansion will increase the federal reserve and Bank of Canada Governor Stephen Poloz to make rates, he said. The incumbent Canadian consumer is uneasy for maintaining higher horrible costs, in contrast with U.S. services having withdrawn the loan after housing allowance.
For Mylonas it may be good news in US the wrong news for Canada.
"If the UE economy is doing pretty well and the Fed is heading in the right direction, it is very hard for the Bank of Canada to sit down and not follow the Fed," said Mylonas. "We are about to reach that bank of Canada flipping it out of the next review if it is not already."
If Mylonas is law, it would be the first of 1951 that Canada enter into a recess without the Union also contracting.
Canada's economic fortunes are always firmly connected to its southern neighborhoods, the destination for about third in the middle of exports. The Union of the economy has reduced its inequality to the least credit crisis in almost a century, led by a plunge in real estate. In Canada, for the most part, it was the crash, companies and consumers had been guilty of debt since then, Mylonas said.
The debt to disposable income Canada in Canada ended at the end of September, 175 percent, out of 137 percent in 2006, before the start of the financial crisis. For this reason, the family became U.S. on disposable income in September, the lowest since 2001, below 100 percent, according to data compiled by Bloomberg. Even at the recent peak, the American ratio has never mentioned 140 percent.
"In those 10-year periods where the UT was on a diet, it became convivial, Canada could have the only food that is to blame," said Mylonas, adding a medical analogy. "Eventually you go to the doctor and the doctor says," Sorry, you have to eat the junk. "That's painful."
Canada & # 39; s housing brand is already a minority sign, with house sales last year down to its lowest since 2012, according to the Canadian Real Estate Association. The number of consumers who sought the debt relief that jumped 5.1 percent from a year earlier in November called the Ottawa office on January 4.
"As debt for disposable income goes from 180 to 130, recreation will look much more like the U.S. one, hard and long," said Mylonas.
Both the economists and the Bank of Canada are both shortly before a recession. The chance of a recess over the next 12 months is about 20 percent, according to a Bloomberg study of 10 analysts, Jan 11. Earlier in this month cut its central bank's 2019 growth forecast to 1.7 percent, while estimating its 2020 forecast. 2.1 percent. The odds of a US dollar are higher, with 25 percent, based on 49 estimates.
Investors are obviously not treatable as if control is immediate. This year, the Canadian dollar has been the most active in G-10 killings, while the main dialer jumped 7 percent, the best start to a year since 1980.
Traders do not park on a finite walk of Poloz, who worked on the BCA Research in & nbsp; & nbsp; & nbsp; 90 & nbsp; 90. May the chances of a major rise be at about 30 percent, according to futures contract deals.
"If the Bank of Canada does not target the Fed, the reason it does not lift is likely to work in bad news," such as poor economic growth, Mylonas said. "If that's the case, then my text will play for Canada rather than most minds."
– With the help of Erik Hertzberg and Kristine Owram.