The Canadian Real Estate Association (CREA) reported that existing home sales in Canada dropped by 0.1% in March, declining for a fifth consecutive month.

On a year-over-year basis, home sales declined by 2.3%. Among Canada’s two largest markets, year-over-year home sales dropped in Vancouver, but picked up in Toronto.

The benchmark home price declined by 0.4% in March to $659,100, which is the lowest since early 2021.

CREA adjusted its outlook for Canadian home sales this year. The real estate organization expects home sales to increase by 1.0% this year, which is down from its January projection of 5.1% growth.

CREA says borrowing costs have already risen, as evidenced by the rise in the Government of Canada five-year bond yield. Higher inflation and the potential for the Bank of Canada to raise its benchmark overnight interest rate this year could put further upward pressure on mortgage rates.

U.S. wholesale prices increased by 0.5% for a second straight month in March, coming in below expectations as the conflict in the Middle East was expected to push prices up even more.

Energy prices surged by 8.5% over the month as oil prices rose on supply concerns. This was partially offset by a drop in food costs.

On a year-over-year basis, producer prices rose by 4.0% in March, which was the largest increase since February 2023.

Export prices also increased substantially on a year-over-year basis, rising by 5.6% in March, its biggest annual increase since November 2022. The increase was driven by higher prices for industrial supplies and materials.

Despite the lower-than-expected reading of producer prices, inflationary pressures are building inside the U.S. economy. Energy inflation has risen, which is likely to keep measures of inflation elevated over the months to come. The U.S. Federal Reserve Board will need to tread carefully as it seeks to keep inflation contained, while providing the necessary support for the U.S. economy..

China’s gross domestic product (GDP) expanded by 5.0% year-over-year in the first quarter of 2026. This marked the fastest pace of GDP growth since the second quarter of 2025, putting growth on pace to top the government’s target for 2026.

Over the quarter, the economy benefited from strong manufacturing activity and a rise in exports.

However, certain pockets of weakness lingered, which weighed on overall growth. In particular, domestic demand remains subdued and the property market remains challenged.

After strong economic activity in January and February, activity slowed in March as tensions in the Middle East intensified, which pushed up energy costs and threatened the strong start to the year for China’s exports.

Beijing is likely to maintain its plans to add more stimulus to the economy. While the government has focused on propping up domestic demand, further efforts may be needed to keep manufacturing and export activity strong amid the conflict in the Mideast.

The International Monetary Fund (IMF) released its 2026 World Economic Outlook, which showed the IMF is concerned the conflict in the Middle East will weigh on global economic activity.

The IMF lowered its projection for global economic growth in 2026 to 3.1% from its January projection of 3.4%.

The global economic organization believes the global economy was poised to benefit from less trade uncertainty and accommodative monetary policy. However, the conflict in the Middle East has clouded its outlook. The IMF believes higher prices will weigh on confidence, hinder global economic activity and raise the possibility of central banks globally raising interest rates.

Looking at Canada, the IMF expects its economy to expand by 1.5% this year, which would be down from the 1.7% rate of growth last year. Canada is facing trade uncertainty with the Canada-United States-Mexico Agreement still needing to be reviewed.

The conflict in the Mideast has thrown outlooks for the global economy this year into disarray. There is a high level of uncertainty about the conflict’s potential length, how high it may push oil prices and the impact on inflation and central bank actions.