Canada: Household indebtedness eases marginally – RBC

Robert Hogue, senior economist at Royal Bank of Canada, notes that Canada’s debt-to-income ratio has dipped marginally to 177% in Q2 as debt service ratio matches all-time high of 14.9%, with back-to-back asset gains propelling net worth to new heights.

Key Quotes

“The national balance sheet accounts overall provided a mildly encouraging picture for households but with one major caveat: debt servicing costs continued to eat up a (very slightly) larger share of disposable income.”

“Significant declines in interest rates over the past several months and slow growth in household debt (which grew at a near cycle-low of 3.8% in Q2) are poised to bring some relief on that front in the period ahead though. The oft-cited debt-to-income ratio edged lower for the third-straight quarter albeit marginally.”

“At 177%, it still points to elevated household indebtedness in Canada. A sizable rebound in both financial and real estate assets over the first half of this year bolstered net wealth. Policy makers no doubt will find something to like in these numbers. Yet we’re still a long distance from writing off household debt from the list of top vulnerabilities for Canada’s economy.”


Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Feed news

Latest Forex News

Editors’ Picks

EUR/USD drops below 1.11 amid upbeat US data, trade concerns

EUR/USD is trading below 1.11 after robust US housing figures and solid consumer sentiment figures were published. Earlier, the common currency suffered from the concerns of new US tariffs on the EU.


GBP/USD down 100 pips after UK retail sales badly disappoint, amid USD strength

GBP/USD has plunged below 1.3050 after UK retail sales badly disappointed with a fall of 0.6% in December, on top of downward revisions. Odds of a BOE cut have risen.


Crypto market hyperspace mode On

The secondary actors of the crypto-sphere awaken and rally hard. Leading coins battle with greater resistance at the gates of a full bullish market. The only risk is an over-shoot, but that sentiment remains neutral.

Read more

Gold: Sustained move beyond 200-hour SMA sets the stage for further gains

Gold edged higher through the mid-European session on Friday and is currently placed near the top end of its weekly trading range, around the $1560 region.

Gold News

USD/JPY: Losing bullish momentum but retaining gains

Chinese encouraging data kept markets in risk-on mode at the beginning of the day. The US January Michigan Consumer Sentiment Index is seen at 99.3, matching December figure. USD/JPY holding at the upper end of its weekly range could correct lower.