Release Explanation: Building permits cover the amount of residential and non-residential Building Permits issued in a month. Act as a leading indicator on the Construction Market sentiment because obtaining a permit is among the first steps in constructing a new building. According to Trade Team Members, “The report will affect future sales of new construction and then eventually Retail Sales, GDP and Durable Goods as new additions are fitted out with fixtures and fittings”. “A currency will eventually be affected by these numbers as they are the first phase in the home construction process”. Trade Team Members said. Trade Desk Thoughts: Canadian Building permits rose by a whopping 23.5% in March, halting five consecutive monthly declines. The report was mainly pulled higher by demand coming from the non-residential side, which rose 47.9% to $2.3 billion. At the same time, residential building permits advanced 5% to $2.2 billion in March. 

Following a 30.0% decrease in February, the value of the non-residential sector increased in six provinces, mainly as a result of gains in the commercial and institutional components. In the commercial component, the value of permits increased 45.6% to $1.4 billion. This increase came mostly from higher construction intentions for office buildings in Ontario. Permits in the institutional component increased 89.2% to $722 million, following a 54.2% decline in February

Municipalities issued $817 million worth of multi-family permits in March, up 7.3% from February. Single-family permits halted their eight-month decline, increasing 3.7% to $1.4 billion. 

“The release paints a very strong picture of the Canadian housing sector in March, but a single release does not build a trend. Only after a longer period, will the market be able to tell if this was a bounce from its lows, or if the Canadian housing market established a bottom,” Trade Team said.  

Forex Technical Reaction: The cad declined 40 pips during the news release, breaking below the neutral pivot point (1.1745).