Canada\u2019s building permits rose by 6.8% month-on-month in December. This was above the expected increase of 5%.<\/p>\n
The data shows a stronger monthly gain than forecast. No further figures were provided in the update.<\/p>\n
The strong building permit number from December 2025 suggests the Canadian economy had more momentum heading into the new year than we initially thought. This kind of strength in the housing pipeline is a key indicator the Bank of Canada watches closely. It makes an early interest rate cut in March or April much less likely.<\/p>\n
We should be looking at options on CORRA futures, pricing in a reduced probability of a rate cut before the summer. Last month’s CPI data for January 2026 showed core inflation remaining stubborn at 3.1%, which supports the view that the Bank will remain patient. This situation feels similar to what we saw in 2023, when resilient economic data repeatedly forced markets to delay their rate cut expectations.<\/p>\n
This hawkish tilt for the Bank of Canada is bullish for the loonie, especially as oil prices have firmed up above $85 WTI. We should consider buying USDCAD put options or establishing put spreads to capitalize on potential Canadian dollar strength. Recent data from the Commitment of Traders report has already shown speculative net shorts on the CAD have been decreasing for three straight weeks.<\/p>\n
For equities, this creates a split opportunity that can be played with derivatives. The data, especially following the surprisingly strong January 2026 jobs report which added 45,000 jobs, supports buying calls on construction material ETFs. Conversely, the “higher for longer” rate outlook is a headwind for rate-sensitive sectors, making puts on Canadian REIT ETFs an attractive hedge.<\/p>\n","protected":false},"excerpt":{"rendered":"
Canada\u2019s December building permits rose 6.8% month-on-month, beating expectations of a 5% increase, signaling stronger demand.<\/p>\n","protected":false},"author":62,"featured_media":0,"comment_status":"","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-41597","post","type-post","status-publish","format-standard","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/41597","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=41597"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/41597\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=41597"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=41597"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=41597"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}