Daily Wrap-up: Oil down almost 5 per cent, TSX plunges

Oil down almost 5 per cent, TSX plunges... Canada’s interest rates to stay low for at least a year - Reuters poll... OFSI gets tough with mortgage lenders...

Steve Randall
Oil down almost 5 per cent, TSX plunges
Expectation that the US crude stockpile draw would help the supply glut was wide of the mark, official data showed Thursday.

The EIA reported a draw of 2.2 million barrels whereas the American Petroleum Institute had reported a 6.7 million draw yesterday. Prices were down almost 5 per cent.

Oil wasn’t the only negative though as gold producers’ stocks fell along with precious metal prices and the Canadian dollar also lost some ground.

Equities were mixed with Asian and North American indexes broadly lower and Europe managing to close generally higher.

On the main TSX index, gold producers and energy firms were the main drags due to declining commodity prices.
The S&P/TSX Composite Index closed down 96.60 (0.68 per cent)
The Dow Jones closed down 22.74 (0.13 per cent)
Oil is trending lower (Brent $46.47, WTI $45.21 at 4.10pm)
Gold is trending lower (1360.70 at 4.10pm)
The loonie is valued at U$0.7685
Canada’s interest rates to stay low for at least a year - Reuters poll
A survey of economists reveals that there is little expectation of a rise in Canada’s interest rates in the next year or more. The Brexit vote and other economic conditions have softened the outlook for the domestic and global economy and the 40 economists polled by Reuters believe there will be no BoC rate hike until late 2017.

The outlook is for 0.5 per cent to be held when the BoC meets next week with a rise of 0.25 per cent by the end of 2017 and a further increase to take the rate to 1 per cent by mid-2018.
OFSI gets tough with mortgage lenders
Financial regulator OFSI is warning banks that they must tighten scrutiny of mortgage applicants to ensure that they are not taking on risky loans. Verification of income, appraisals, debt service ratios are all areas where the lenders must be more diligent says the regulator.

"OSFI expects mortgage lenders to verify that their mortgage operations are well supported by prudent underwriting practices, as well as sound risk management and internal controls that are commensurate with these operations,” OFSI stated.