Latest news with #JohnMacFarlane
Yahoo
7 hours ago
- Business
- Yahoo
'Financial fragility is deepening': Canadian credit card data for Q1 show growing strain
Signs of deteriorating credit health among the most financially vulnerable Canadians are a 'flashing signal,' credit analytics firm FICO says. New credit card data for the first quarter of 2025 show an increasing reliance on credit cards and more Canadians having trouble paying their balances, FICO says, with issues most pronounced among younger and 'thin-file' borrowers — people without much of a credit history. 'Consumers with fewer banking relationships — particularly younger individuals or those relying solely on credit products — are under increasing pressure,' FICO's report says. 'The surge in serious delinquencies among monoline borrowers' — people with credit cards issued by firms that don't offer other banking services — 'is a flashing signal: financial fragility is deepening where there is the least cushion.' Economists at financial institutions and the Bank of Canada (BoC) have been paying close attention to Canadians' spending and credit health as ongoing trade tensions with the U.S. roil the economy. In a speech in early June, BoC deputy governor Sharon Kozicki noted that credit card data is one way the Bank can better understand Canadians' 'real-time spending patterns.' FICO's data show Canadians are paying down less of their credit card balances on average, and note that 'average balances remain elevated' and are rising again from COVID-era lows, when spending was generally restrained. On average, Canadians repaid just over 47 per cent of their balances in March, down from a pandemic peak of 60 per cent in September 2022. Balances have risen to $3,098 from $2,938 during the pandemic. 'Although still below pre-pandemic highs, the recent upward trajectory signals renewed pressure on household finances, potentially from rising living costs or shifting spending habits,' FICO's report said. FICO notes that the rising balances aren't a consequence of higher spending — average monthly spending was down 4.2 per cent from the same period last year, to $1,549, which FICO says 'reflects more cautious consumer behaviour or financial constraint as households rebalance their budgets.' Overall, rates of missed payments are 'broadly stable,' FICO says, but risks are concentrated in some borrower segments. Those missing a single payment was up eight per cent from last year, which FICO says 'points to the beginning of strain among a growing portion of the population.' Among monoline borrowers, who can have lower credit ratings, FICO notes a 'key turning point' in January, when the proportion missing two or more payments hit a five-year high. 'This spike highlights sustained pressure on higher-risk segments — particularly those with limited financial history, fewer products with a financial institution, or recent entry into the credit market,' FICO's report says. John MacFarlane is a senior reporter at Yahoo Finance Canada. Follow him on X @jmacf. Download the Yahoo Finance app, available for Apple and Android.
Yahoo
30-05-2025
- Business
- Yahoo
Canada's economy grew 2.2 per cent in the first quarter of 2025: Statistics Canada
Canada's economy grew 2.2 per cent in the first quarter of 2025, Statistics Canada said on Friday, maintaining the pace recorded in the final quarter of last year. Economists had expected the economy to grow 1.5 per cent on an annualized basis in the first quarter, according to consensus estimates published by RBC Economics. Real gross domestic product (GDP) increased 0.1 per cent in March, matching expectations. The quarterly growth came in above the Bank of Canada's forecasts. The central bank expected real GDP to grow 1.8 per cent on a quarterly annualized basis, according to its latest Monetary Policy Report (MPR). The Friday data follow fourth quarter 2024 results that came in above expectations, driven by higher spending and increased business investment and exports. This story will be updated. John MacFarlane is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jmacf. Download the Yahoo Finance app, available for Apple and Android. Sign in to access your portfolio
Yahoo
05-04-2025
- Business
- Yahoo
Investors poured record-breaking amounts into Canadian ETFs in March: National Bank
Flows of money into Canadian exchange-traded funds (ETFs) in March shattered previous monthly records, according to new data from National Bank of Canada Financial Markets, with investors prioritizing assets likely to better withstand a trade war. Inflows for March totalled $13.5 billion, 28 per cent higher than the previous record of $10.6 billion, set last December. A National Bank report on the data, published Wednesday, says all asset classes saw positive inflows, noting trends into funds that might offer lower risk in the tariff era. 'Investors are digging positions for a trade war by sending assets overseas and seeking low-[volatility] exposures,' the report said. Inflows into fixed-income funds totalled $6.3 billion, equity funds saw inflows of $5.9 billion, and commodity funds — mainly gold bullion ETFs — had inflows of $165 million. Within the equity grouping, inflows to U.S. equity funds were positive but lower than any other major equity ETF category. 'International equity ETFs saw a sudden $3.8 billion explosion in demand as investors flocked overseas to sidestep a potentially damaging trade war instigated by the U.S. president's tariff announcements early in the year,' the report said. 'While this trend existed on a smaller scale for the past few months, it was driven by new desire to diversify away from the potentially overvalued U.S. equity market as its two-year bull run meets a correction.' National Bank observes some large block investments in international equity index funds offered by TD Bank (TPE), Desjardins (DMEI), BMO (ZEA) and iShares (XEF), 'hinting at deeper institutional demand and model repositioning.' The year-to-date numbers tell a similar story, with slightly more inflows into equity funds ($14.3 billion) than fixed income ($13.2 billion), and investors showing a preference for international equity over U.S. Although international equities have tended to broadly underperform U.S. equities in recent years, the report points out that 'year-to-date, broad developed markets (and emerging markets) have eked out positive returns in 2025 so far, finally outperforming U.S. large, mid, and small-cap indices by wide margins.' Last month saw the launch of 24 new Canadian ETFs, National Bank says, noting that 'leverage is a common strategy' among the new funds. 'Target date bond, single factor, and covered call ETFs were also launched.' John MacFarlane is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jmacf. Download the Yahoo Finance app, available for Apple and Android. Sign in to access your portfolio
Yahoo
04-04-2025
- Business
- Yahoo
Investors poured record-breaking amounts into Canadian ETFs in March: National Bank
Flows of money into Canadian exchange-traded funds (ETFs) in March shattered previous monthly records, according to new data from National Bank of Canada Financial Markets, with investors prioritizing assets likely to better withstand a trade war. Inflows for March totalled $13.5 billion, 28 per cent higher than the previous record of $10.6 billion, set last December. A National Bank report on the data, published Wednesday, says all asset classes saw positive inflows, noting trends into funds that might offer lower risk in the tariff era. 'Investors are digging positions for a trade war by sending assets overseas and seeking low-[volatility] exposures,' the report said. Inflows into fixed-income funds totalled $6.3 billion, equity funds saw inflows of $5.9 billion, and commodity funds — mainly gold bullion ETFs — had inflows of $165 million. Within the equity grouping, inflows to U.S. equity funds were positive but lower than any other major equity ETF category. 'International equity ETFs saw a sudden $3.8 billion explosion in demand as investors flocked overseas to sidestep a potentially damaging trade war instigated by the U.S. president's tariff announcements early in the year,' the report said. 'While this trend existed on a smaller scale for the past few months, it was driven by new desire to diversify away from the potentially overvalued U.S. equity market as its two-year bull run meets a correction.' National Bank observes some large block investments in international equity index funds offered by TD Bank (TPE), Desjardins (DMEI), BMO (ZEA) and iShares (XEF), 'hinting at deeper institutional demand and model repositioning.' The year-to-date numbers tell a similar story, with slightly more inflows into equity funds ($14.3 billion) than fixed income ($13.2 billion), and investors showing a preference for international equity over U.S. Although international equities have tended to broadly underperform U.S. equities in recent years, the report points out that 'year-to-date, broad developed markets (and emerging markets) have eked out positive returns in 2025 so far, finally outperforming U.S. large, mid, and small-cap indices by wide margins.' Last month saw the launch of 24 new Canadian ETFs, National Bank says, noting that 'leverage is a common strategy' among the new funds. 'Target date bond, single factor, and covered call ETFs were also launched.' John MacFarlane is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jmacf. Download the Yahoo Finance app, available for Apple and Android. Sign in to access your portfolio
