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Posthaste: How much pain mortgage holders can expect when the Bank of Canada starts hiking – Financial Post

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Good Morning!

One more sleep before the highly-anticipated Bank of Canada rate decision.

Whether Governor Tiff Macklem and his deputies pull the trigger Wednesday or not, it seems pretty certain rates will rise within the next few months.

So the real question now is how much the Bank might hike in this cycle and what it means to mortgage holders.

James Laird, co-founder of Ratehub.ca and president of CanWise Financial mortgage brokerage, says lenders in Canada have already started to move their variable and fixed rates higher in anticipation of a Bank of Canada hike.

“However there are still some lenders who have not yet increased rates. Therefore, if you require a mortgage in the next 120 days, it’s best to apply quickly to hold today’s rate,” he said.

Sung Lee, an RATESDOTCA expert and mortgage agent, is also seeing rates rise. Fixed-rate insured mortgages are now ranging from 2.44% to 2.79%, while a few months ago clients were able to get sub-2%, he said.

“It’s possible that we might even see a reduction in variable-rate discounts on top of prime rate increases. Rising rates will have a big impact on borrowers as the cost to access credit continues to get more expensive,” said Lee.

If the Bank raises its overnight rate by 25 basis points tomorrow, a homeowner with a five-year variable rate mortgage of $649,530 at 0.85% amortized over 25 years would see monthly payments rise from $2,404 to $2,477, according to Ratehub.ca’s mortgage calculator.

That’s $73 more per month or $876 per year on their mortgage payments.

If the Bank raises the rate by 50 basis points, monthly payments would rise to $2,551. That’s $147 more per month or $1,764 a year.

If those mortgage amounts sound high, remember that in December 2021, the average house price in Canada was $713,542.

The mortgage market will no longer be able to hide from higher rates this year, says BMO senior economist Robert Kavcic.

“Canadian mortgage rates are like a coiled spring set to unwind, but by how much?” he wrote in a note this week.

“On the five-year fixed side of the market, underlying GoC yields could easily point to further upside of roughly 50 bps or more. On the variable side, 100 bps or more of BoC tightening is in the cards over the course of this year.”

That could mean a rise in the mortgage rate the market is priced off from 1.8% at the end of 2021 to 2.7% by the end of 2022.

As of Monday, the market had priced in up to seven rate hikes by the end of the year, which would bring the Bank’s rate to 2%, according to Bloomberg data.

But some economists think this timeline is too steep.

Stephen Brown of Capital Economics finds the market pricing puzzling, because it assumes the Bank of Canada will hike faster and further than the U.S. Federal Reserve, even though inflation is higher in the States.

Moreover, the makeup of Canada’s economy with its “over-dependence” on interest-rate-sensitive housing is very different from its southern neighbour.

Capital believes that the risks will force the bank to pause its tightening cycle at 1.5%, about 50 basis pointer lower than what the market expects.

Analysts at Pacific Investment Management Co. see the central bank moving just four times this year, in line with expectations for the Fed, reports Bloomberg.

Canada’s high household debt and slack remaining in the labour market despite the jobs recovery will prevent the Bank from pushing rates too far, too fast, Vinayak Seshasayee, a portfolio manager overseeing Pimco’s Canadian fixed-income assets told Bloomberg.

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Stop Asking Your Interviewer Cliché Questions

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Most job search advice is cookie-cutter. The advice you’re following is almost certainly the same advice other job seekers follow, making you just another candidate following the same script.

In today’s hyper-competitive job market, standing out is critical, a challenge most job seekers struggle with. Instead of relying on generic questions recommended by self-proclaimed career coaches, which often lead to a forgettable interview, ask unique, thought-provoking questions that’ll spark engaging conversations and leave a lasting impression.

English philosopher Francis Bacon once said, “A prudent question is one half of wisdom.”

The questions you ask convey the following:

  • Your level of interest in the company and the role.
  • Contributing to your employer’s success is essential.
  • You desire a cultural fit.

Here are the top four questions experts recommend candidates ask; hence, they’ve become cliché questions you should avoid asking:

  • “What are the key responsibilities of this position?”

Most likely, the job description answers this question. Therefore, asking this question indicates you didn’t read the job description. If you require clarification, ask, “How many outbound calls will I be required to make daily?” “What will be my monthly revenue target?”

  • “What does a typical day look like?”

Although it’s important to understand day-to-day expectations, this question tends to elicit vague responses and rarely leads to a deeper conversation. Don’t focus on what your day will look like; instead, focus on being clear on the results you need to deliver. Nobody I know has ever been fired for not following a “typical day.” However, I know several people who were fired for failing to meet expectations. Before accepting a job offer, ensure you’re capable of meeting the employer’s expectations.

  • “How would you describe the company culture?”

Asking this question screams, “I read somewhere to ask this question.” There are much better ways to research a company’s culture, such as speaking to current and former employees, reading online reviews and news articles. Furthermore, since your interviewer works for the company, they’re presumably comfortable with the culture. Do you expect your interviewer to give you the brutal truth? “Be careful of Craig; get on his bad side, and he’ll make your life miserable.” “Bob is close to retirement. I give him lots of slack, which the rest of the team needs to pick up.”

Truism: No matter how much due diligence you do, only when you start working for the employer will you experience and, therefore, know their culture firsthand.

  • “What opportunities are there for professional development?”

When asked this question, I immediately think the candidate cares more about gaining than contributing, a showstopper. Managing your career is your responsibility, not your employer’s.

Cliché questions don’t impress hiring managers, nor will they differentiate you from your competition. To transform your interaction with your interviewer from a Q&A session into a dynamic discussion, ask unique, insightful questions.

Here are my four go-to questions—I have many moreto accomplish this:

  • “Describe your management style. How will you manage me?”

This question gives your interviewer the opportunity to talk about themselves, which we all love doing. As well, being in sync with my boss is extremely important to me. The management style of who’ll be my boss is a determining factor in whether or not I’ll accept the job.

  • “What is the one thing I should never do that’ll piss you off and possibly damage our working relationship beyond repair?”

This question also allows me to determine whether I and my to-be boss would be in sync. Sometimes I ask, “What are your pet peeves?”

  • “When I join the team, what would be the most important contribution you’d want to see from me in the first six months?”

Setting myself up for failure is the last thing I want. As I mentioned, focus on the results you need to produce and timelines. How realistic are the expectations? It’s never about the question; it’s about what you want to know. It’s important to know whether you’ll be able to meet or even exceed your new boss’s expectations.

  • “If I wanted to sell you on an idea or suggestion, what do you need to know?”

Years ago, a candidate asked me this question. I was impressed he wasn’t looking just to put in time; he was looking for how he could be a contributing employee. Every time I ask this question, it leads to an in-depth discussion.

Other questions I’ve asked:

 

  • “What keeps you up at night?”
  • “If you were to leave this company, who would follow?”
  • “How do you handle an employee making a mistake?”
  • “If you were to give a Ted Talk, what topic would you talk about?”
  • “What are three highly valued skills at [company] that I should master to advance?”
  • “What are the informal expectations of the role?”
  • “What is one misconception people have about you [or the company]?”

 

Your questions reveal a great deal about your motivations, drive to make a meaningful impact on the business, and a chance to morph the questioning into a conversation. Cliché questions don’t lead to meaningful discussions, whereas unique, thought-provoking questions do and, in turn, make you memorable.

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Nick Kossovan, a well-seasoned veteran of the corporate landscape, offers “unsweetened” job search advice. You can send Nick your questions to artoffindingwork@gmail.com.

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Canadian Natural Resources reports $2.27-billion third-quarter profit

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CALGARY – Canadian Natural Resources Ltd. reported a third-quarter profit of $2.27 billion, down from $2.34 billion in the same quarter last year.

The company says the profit amounted to $1.06 per diluted share for the quarter that ended Sept. 30 compared with $1.06 per diluted share a year earlier.

Product sales totalled $10.40 billion, down from $11.76 billion in the same quarter last year.

Daily production for the quarter averaged 1,363,086 barrels of oil equivalent per day, down from 1,393,614 a year ago.

On an adjusted basis, Canadian Natural says it earned 97 cents per diluted share for the quarter, down from an adjusted profit of $1.30 per diluted share in the same quarter last year.

The average analyst estimate had been for a profit of 90 cents per share, according to LSEG Data & Analytics.

This report by The Canadian Press was first published Oct. 31, 2024.

Companies in this story: (TSX:CNQ)

The Canadian Press. All rights reserved.

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Cenovus Energy reports $820M Q3 profit, down from $1.86B a year ago

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CALGARY – Cenovus Energy Inc. reported its third-quarter profit fell compared with a year as its revenue edged lower.

The company says it earned $820 million or 42 cents per diluted share for the quarter ended Sept. 30, down from $1.86 billion or 97 cents per diluted share a year earlier.

Revenue for the quarter totalled $14.25 billion, down from $14.58 billion in the same quarter last year.

Total upstream production in the quarter amounted to 771,300 barrels of oil equivalent per day, down from 797,000 a year earlier.

Total downstream throughput was 642,900 barrels per day compared with 664,300 in the same quarter last year.

On an adjusted basis, Cenovus says its funds flow amounted to $1.05 per diluted share in its latest quarter, down from adjusted funds flow of $1.81 per diluted share a year earlier.

This report by The Canadian Press was first published Oct. 31, 2024.

Companies in this story: (TSX:CVE)

The Canadian Press. All rights reserved.

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