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​"Chinese Yuan makes up a lower portion of global reserves than the British Pound and even the Swiss Franc, and is just ahead of Canada." Hat Tip to ​@anilvohra69 for the note and graphic in my Twitter feed. US dollar credit to non-bank borrowers outside the United States grew by 4% year on year  to reach $11.9 trillion at end-June 2019. This represents a slight acceleration relative to the 3% annual growth rate observed at end-2018. Bank of International Settlements  October 2019 ​Foreign borrowers of USD denominated debt is accelerating. What gets borrowed in USD has to be repaid in USD and as the USD rises in value, so does the demand for USD. I update my USD vs CAD Canadian Housing Price chart as well as my Canadian Household Debt  chart every month. Our chronic negative Canadian Balance of Trade means that OUR debt obligations continue to provide more stimulus to offshore than onshore producers.​ A rising USD is not good for most Canadians.

INVESTOPEDIA KEY TAKEAWAYS, July 2019
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> A dollar shortage occurs when a country spends more U.S. dollars on imports than it receives on exports.

> Since the USD is used to price many goods globally, and is used in many international trade transactions, a dollar shortage can limit a country's ability to grow or trade effectively.

> Most countries try to maintain a reserve of currencies, like U.S. dollars or other major currencies, which can be used to buy imported goods, manage the country's exchange rate, pay international debts, or make international transactions or investments.​

​Pierre Trudeau’s Washington Press Club speech
“Living next to you is in some ways like sleeping with an elephant. No matter how friendly and even-tempered is the beast, if I can call it that, one is affected by every twitch and grunt.” Pierre Elliot Trudeau, the March 1969 speech to the Washington Press Club.

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​While we wait for the June real estate stats to come out, let's look at the relationship between WTI Oil prices and real estate in Canada. The top chart shows the WTI oil prices dropping into month end lows and as the inset seasonal chart shows, the drop is happening when the price variability is at one of the four low points in the year which suggests this year may not be much different. Now look at the Canadian scene via the TSX cash markets in the chart below. As the chart plots since 2015 demonstrate, when the energy sector price drops so does the real estate sector. These cash markets react quickly to changes "on the ground" and are not restricted by the handicap of finding a buyer.  The relationship between oil prices and real estate are clearly seen in the Calgary housing chart with its total sales plot and the TSX Energy plot overlays, both of which have been descending since 2013 while the energy plot itself has been dropping since the July 2008 peak. It also shows up on my chart of TSX indexes for Energy, Real Estate, Financial Services and Gold... and gold is maybe leading the way for another leg down. Gold heading down makes sense since the U.S. Dollar (my chart of Canadian real estate in USD)  has been rising since 3Q 2017 and a high USD/CAD ratio can quickly unwind marketplace sentiment when it comes to a speculative commodity which real estate has been transformed into with the global suppression of leverage costs.   ​

​Oil Breaks Down: Should Stock Market Bulls Be Worried?

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From CHRIS KIMBLE, technical market analyst:

A couple of weeks ago, I wrote an article about crude oil’s recent correlation to the S&P 500 (stock market) and that its initial move lower may be sending a bearish signal to stocks. Since then, crude oil has fallen sharply through its up-trend line, sending a bearish message to Oil bulls.

Is the S&P 500 the next to fall?

Below is an updated chart of Crude Oil showing the multi-month downtrend (1), and the ultimate break down through its near term up-trend line (2).

More importantly, from a pattern perspective, Crude Oil is putting in a large weekly reversal bar (bearish). This warrants watching as Crude Oil and the stock market remain highly correlated since their peak in October. Stay tuned!

Thanks to Chris Kimble for the chart above; get a FREE TRIAL to his work.

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The Canadian Dollar hit a new low today in it's path to a bottom. This is not good news for foreign buyers who bought real estate in the FOMO craze since the pit of gloom in March 2009. ​

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Canada is a country of consumers of U.S. production and services and as the USD rises in value so will our cost of living. ​For the moment total CPI remains at 2.2% (StatsCan) but the Canadian Yield Curve  warning mounts and as Chris Kimble notes below, a U.S. Dollar breakout "...would likely effect the portfolios of investors around the world". ​

Is King Dollar Creating A Bullish Head & Shoulders Pattern? by Chris Kimble June 28, 2018

King Dollar is a major player in the financial markets. And its moves are especially important to commodities and emerging markets.

Well, portfolio managers and traders in those markets may want to pay attention to today’s chart because the US Dollar may be setting up for a big move. Back at the end of February, we highlighted why the US Dollar was ready to bounce.

That post was written just as King Dollar was testing a confluence of support and nearing resolution from a bullish falling wedge pattern (point 1 on the chart below). Here’s an excerpt:

FROM A TECHNICAL VIEW, THE DOLLAR IS ATTEMPTING TO POKE ITS HEAD ABOVE A BULLISH FALLING WEDGE PATTERN. THIS ALL OCCURRING AFTER HITTING A CLUSTER OF PRICE SUPPORT.

Well, the Dollar did bounce higher. And if today’s chart pattern is a precursor, King Dollar may be ready to morph this bounce into a full-blown rally.

We are testing lateral resistance at the November 2017 highs (point 2). Could this resistance prove to be the neckline of a bullish inverse head and shoulders pattern? It’s currently an incomplete pattern, but even the slightest pullback could form the right shoulder.
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In any event, a breakout here would be very bullish for the Dollar (NYSEARCA:UUP). And this would likely effect the portfolios of investors around the world. Stay tuned!

Or get a FREE TRIAL discount to Chris Kimble's peerless financial market research

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Libor’s spread over the overnight index swap rate, known as Libor-OIS, has widened... another sign that banks face steeper funding costs. Bloomberg March 12, 2018 As noted on the charts: "About $350 trillion of financial products and loans are linked to Libor, with a large chunk hinged to the dollar-based version of the benchmark." Bloomberg March 12, 2018, and...

Why Consumer Debt is Canada's Greatest Economic Risk
"Consumption to Top Off" Bloomberg March 15, 2018

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While we wait for the Clinton Trump toss up at Hofstra U. tonight, let's look at some data that affects everyone on the continent, ie: manufacturing wages measured in USD since the gloom of 2009 in Canada, the U.S. and Mexico. I have been showing for some time now, that Canada's net Federal Direct Investment balance has been negative for nearly 20 years and last year it widened significantly. ​

​Canadians are just $200 away from being overwhelmed by debt, new survey finds Financial Post September 28, 2016

> Calgary-based MNP LLP, said 56 per cent of those polled — up from 48 per cent surveyed six months ago — are close to facing negative cash flow should they take on up to another $200 in monthly debt.

>The online survey of of 1,502 Canadians conducted between Sept. 6 and Sept. 12 also found 31 per cent are already not paying their bills on time, making them technically insolvent, MNP says.

> A survey this month from TransUnion found 718,000 Canadians can’t even absorb a 25-basis point increase in interest rates without being in a negative cash flow situation. One percentage point would drive 917,000 over the edge, the credit rating agency found.

> In another recent study, the Canadian Payroll Association said 48 per cent of Canadians couldn’t make ends meets if they missed just one paycheque – a dire picture of a country living paycheque-to-paycheque.

> MNP said there is some positive news about debt costs. More Canadians now say they are concerned about their debt: 52 per cent, up from 43 per cent six months ago.
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ITEM: BlackBerry Abandons Its Phone New York Times September 28, 2016 - In recent years, BlackBerry has cut thousands of jobs and closed several operating centers, including one in this city (Halifax), over the last three years. A company spokeswoman declined to discuss any future layoffs.

"Vancouver in Canada has been identified by Swiss bank UBS as the global financial center with the riskiest housing bubble."

"Currently, house prices in Vancouver seem clearly out of step with economic fundamentals, and are in bubble risk territory."​

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