TSX INDEXES for Energy, Real Estate, Financial Services, Gold and the Bank of Canada Commodities in $CAD
In October 2018 the Canadian commodities index (CCI red plot line) along with Crude Oil continued dropping after the short lived July CPI print at 3% (1 month lag; Sept CPI now back to 2.2%). The counter up-trending USD/CAD since the beginning of February 2018 will continue to increase import costs into Canada.
Note that the inset Thompson Reuters CRB chart in the chart above shows that global commodities measured in USD has been dropping since 2008, although recently since September, there has been a near term rally in commodities.
The Canadian energy sector excitement at the end of FY 2016 has been muted by a weakening CAD and from all the trumpeting below the border about energy independence and tariff threats. The relentless energy sector downtrend (black plot line) since the manic high of July 2008 continues to stair step down.
Gold bullion prices although building a long term base took another hit along with the energy sector as the strengthening USD weighs on both.
In 2007 financial fears and energy anxieties had real estate appraisers dusting off their calculators and adding the income approach and replacement calculations back onto their comp-heavy arguments.
Comparative analysis becomes moot in a no-bid-thin-bid market and gives way to fundamental and financial analysis when looking at physical assets.
Now a decade later, the energy sector is showing signs of exhaustion. If it rolls over, the animal spirits in the real estate market will get spooked.
Calgary buyers are still hitting asking prices despite rising inventory but perhaps neutralized by earnings which remain the highest in the country.