First National Financial LP

Market Commentary: Jason Ellis reviews this week’s numbers

  • Jason Ellis, President and Chief Executive Officer


As you well know, Monday was New Year’s Day… the first of 11 statutory holidays in Ontario this year.  It’s just as well, as Treasury Guy didn’t make it out of bed until the little hand was at 11:00. The rest of the day involved making lists of resolutions and subscribing to a myriad of apps to track my progress.  Half of which I will never open, the other half I will stop using in the middle of February.  I know this, but I do it anyway.  I shouldn’t call them resolutions.  I should call them “casual promises to myself that I’m under no legal obligation to fulfill”.

On Tuesday, the new year started with a sell-off in the bond market that lasted all week, taking 5-yr GoC’s to 3.37%...20bps higher than where we left them on New Year’s Eve (but still 100 bps lower than 3-months ago).  For context, the low yield in 2023 was 2.84% and the high was 4.42%.

Against that backdrop, the Toronto Regional Real Estate Board (“TRREB”) released some encouraging December sales data.  According to TRREB, Toronto home sales increased 11.5% compared to a year ago and the average price climbed 3.2% to $1,084,692.  Treasury Guy is not ready to call this a rebound yet though.  The full impact of higher rates, including a continuing moderation of economic activity, may still have a role to play.

Friday employment data

The big news today was the employment data for US and Canada.  Here at home, the unemployment rate remained unchanged at 5.8% despite weaker than expected new job creation and strong population growth.  The sticky unemployment rate is explained by a sharp decline in the participation rate.  It’s quite reasonable to expect the participation rate to increase once job seekers shake off their holiday hangover and realize they need to pay for all those presents (like the G.I Joe with the Kung-Fu grip) they bought on credit for Christmas.  Perhaps more important than the employment data is the evidence of continuing wage pressure as evidenced by the 5.7% year over year surge in hourly earnings.  This will complicate the Bank of Canada’s task as it relates to crafting future monetary policy.

In the US, there was an upside surprise in payrolls that was largely offset by prior month revisions.  The unemployment rate was unchanged at 3.7%.  Like it did in Canada, wage growth came in hotter than expected at 4.1% which will likely price out some of the probability previously assigned to a March rate cut by the Fed.


Bitcoin touched $45,000 this week, its highest ‘valuation’ since April 2022.  That’s up 2.5X from $17,500 in December 2022.  I still don’t understand it, but it doesn’t hurt to mention it.  No plans for Bitcoin mortgages here any time soon though.

Free advice

Don’t forget to pay attention to your elders…they might just have something to teach you. If you think you are smarter than the previous generation, just remember, 50 years ago the owner’s manual of a car showed you how to adjust the valves.  Today it warns you not to drink the contents of the battery.  Don’t be a battery drinker this year.

Have a good weekend,

Treasury Guy