CANADA: Analysts Eye Energy Prices; Tax Holiday Base Effects Ahead (2/2)

A new survey from YouGov has found that, “Roughly equal shares of Americans say that Democrats in Congress should have and should not have held out for changes to health care funding — such as extending subsidies for Affordable Care Act (ACA) coverage — before agreeing to end the government shutdown (41% vs. 39%)” The survey notes, “Three weeks earlier, more Americans said Democrats should than should not hold out for health care funding (45% vs. 32%)”

• Another YouGov poll conducted Monday — after the Senate reached the agreement to fund the government and end the shutdown but before the measure passed — found that “Republicans approve of the shutdown deal by 56% to 11%. Nearly half (47%) of Democrats disapprove and 31% approve.”
• YouGov notes, “The poll that ran after the post-shutdown deal also found that Republicans in Congress are seen as benefitting more from the deal than Democrats are (38% say Republicans benefit more and 9% say Democrats do); 20% believe Republicans and Democrats benefit equally from it."

Figure 1: “Do you approve or disapprove of the deal reached by Congress to fund the government and end the shutdown? (%)”

Source: YouGov

Building permits rose more quickly than anticipated in September at 4.5% M/M SA (0.9% expected), but this was largely offset by a downward revision to prior (-4.0%, vs -1.2%) in this volatile series.

• Residential permitting rose 4.8% to a 5-month high level, with non-residential up 4.0% rising for the first time in 5 months.
• However note these figures are in value and not volume terms, making the 11.2% Y/Y overall drop particularly poor. The real rise in September was 4.2% M/M. But for Q3 as a whole, the value of housing permits in constant terms fell to the lowest in series history back to 2018.
• For the 3rd quarter, permits fell 5.4% in nominal terms for a 2nd consecutive quarterly decline, with Ontario non-residential permitting driving the Q3 decrease (after jumping in Q2).
• Overall despite the September pickup, the softness in broader permits bodes for some softer readings ahead in housing starts and overall construction.
• The BOC's latest Monetary Policy Report notes "Residential investment is anticipated to grow modestly over the projection horizon.  Housing starts are anticipated to remain elevated and grow modestly" though for business capex "Tariffs and trade policy uncertainty are expected to remain a significant headwind to investment into 2026."

• RES 4: 0.8875 High Apr 25    
• RES 3: 0.8868 61.8% retracement of the 2022 - 2024 bear leg  
• RES 2: 0.8848 1.618 proj of the Sep 15 - 25 - Oct 8 price swing 
• RES 1: 0.8838 High Nov 12
• PRICE: 0.8825 @ 17:13 GMT Nov 12
• SUP 1: 0.8763 Low Nov 3   
• SUP 2: 0.8761 20-day EMA 
• SUP 3: 0.8722 50-day EMA
• SUP 4: 0.8656 Low Oct 8 and a key support  

The trend cycle in EURGBP remains bullish and the cross has traded higher today, resulting in a breach of 0.8830, the Nov 5 high. The break confirms a resumption of the uptrend and maintains the price sequence of higher highs and higher lows. Sights are on 0.8848, a Fibonacci projection. On the downside, initial key short-term support to watch lies at  0.8761, the 20-day EMA. A break would highlight a possible short-term reversal.