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WHAT'S ON TAP
HOT OFF THE PRESS
$51B returns to Canada
Canada saw a net securities inflow of $51B in July, as Canadian investors cut foreign exposure by $31B…
… driven by a record $31B of selling in US equities (mainly large cap tech)…
… and $5B in US treasuries, which takes the total YTD divestment to $37B.
Here at home, foreign investors added $21B in Canadian securities, including $23B of federal debt ($104B YTD vs. $14B last year)…
… and $7B of equities, led by resources.
At nearly 47% of federal debt ownership (40% last year), it’s clear that foreign investors are turning to Canada…
… which looks set to continue if the recent Investment Summit is any indication.
Housing starts stabilize
Housing starts missed estimates in August, stabilizing at 229K despite a continued slowdown in multi-unit activity…
… and decreasing slightly Y/Y on a mixed bag at the provincial level, with declines in Ontario partly offset by strength in Quebec.
For the first time in a while, unabsorbed inventory inched lower M/M…
… while new multi-unit absorption improved, as the grind lower in construction activity decreases new condo supply…
… and allows purpose-built rental to keep taking share.
Fuel-driven inflation could drive BoC rate call
Industrial product prices rose 1.3% in August, ahead of expectations…
… driven by higher energy prices on a resumption in the US-Iran conflict, which pushed petroleum product prices up 4% sequentially to new highs.
Similar dynamics played out in raw materials, with crude products up 7%…
… which could influence the Bank of Canada’s interest rate decision in October, especially after watching the Fed hike on Wednesday.
However, if higher energy prices did spill over into other components of the CPI, members agreed that it could require a monetary policy response to prevent broad-based inflation from setting in.
Building permits fall 17%
Building permits fell 17% to ~$12B, worse than expectations…
… driven by a normalization in institutional activity, which declined $1.5B sequentially - most of which is attributable to the non-repeat of a large medical facility in Ontario.
Residential permitting contributed $700M to the decline as well, with lower multi-family intentions in BC, Alberta, and Quebec leading the way.
ON OUR RADAR
GAINERS & LOSERS
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GFL Environmental (GFL) closed up 5% after rumours of a private equity bidding war for the waste giant surfaced, which isn’t the first time…
… since its $6.4B acquisition of SECURE. The market didn’t like that deal, but we did - given 80% of volumes are recurring, western Canada is attractive right now, and it benefits from higher oil prices…
… creating a natural hedge against fuel-driven margin compression in solid waste. With a scaled North American platform ($2.3B of 2026E EBITDA)…
… and a clear growth playbook…
… it’s no surprise the mega funds are lining up. Let’s see if we end up with a deal.
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