The members of the European Union signed an agreement today to pledge greater financial accountability and allow for stronger enforcement of the rules.  This may seem like they are closing the barn door after the horse has already run away but in financial markets, predictability and confidence are always desired. Increasing unemployment rates across Europe are partially the result of austerity measures taken to combat the sovereign debt crisis.  If the unemployment rates continue to increase, we may see larger and more violent reactions from the citizens of the most affected countries.

Greece has managed to stay out of the main headlines for a few days now with the latest bailout agreement.  Although Greece will likely become problematic again later this year, Spain has been the latest country to see negative headlines as it announced that it will miss budget targets.

The Canadian dollar was stronger this week and it remains at around $1.01.  Though the dollar may see some medium term weakness if European economic news turns really negative again, the long term prospects for the Canadian dollar remain very high.  Longer term values of $1.05 and even $1.10 are very possible based on current information.

Although Canadian economic growth is not tremendously strong, it is still doing very well compared to most other industrialized countries.

 Mortgage rates remain very low with 5 year terms available as low as 3.19% and 10 year rates at 3.99%.

Variable rates remain unattractive for most clients when compared to current fixed rates and will remain so for the foreseeable future.

Jason McLean  BSc, AMP
jason@garibaldimortgage.com