Headlines

Toronto’s housing market faces a high risk of a correction as soaring home prices have outstripped income growth even as the city is facing a rising supply of unsold condos, Canada’s federal housing agency warned, The Globe and Mail reported. In a new quarterly forecast on the housing market, Canada Mortgage and Housing Corp. said it is upgrading the risk of “problematic conditions” in the country’s largest housing market to “high” from “moderate” because it saw evidence the market was heating up this year even though home prices are already overpriced.

Germany softened its resistance to a third bailout package for Greece on Wednesday, raising the chances for speedy approval of the draft plan in time for the country to make a crucial debt payment next week, the International New York Times reported. While a political obstacle course still lies ahead, officials in Berlin and Brussels spoke of a markedly improved negotiating climate. Eurozone finance ministers scheduled a meeting on Friday in Brussels at which they could give their imprimatur to the bailout deal.

The insolvency of Royal Imtech's German arm last week was triggered by the parent company's failure to pay the unit 21 million euros ($23 million) it owed, Imtech Deutschland's insolvency administrator said, Reuters reported. Royal Imtech filed for protection from its creditors on Tuesday, five days after the German unit made a similar filing, overwhelmed by accounting fraud in Germany that triggered three years of operating losses and major asset writedowns.

Revenue authorities need to be “vigilant” in monitoring the super-rich, according to research that called on many of them to improve their scrutiny of their richest taxpayers, the Financial Times reported. The study by the Paris-based OECD is a further sign of the pressure on tax departments to squeeze more revenue out of wealthy individuals. Cash-strapped governments are already clamping down on evasion and avoidance to shore up their public finances and respond to public anger over widening economic inequality and alleged tax dodging.

Mexico’s central bank on Wednesday cut its growth outlook for this year, putting pressure on the bank to keep interest rates low as long as possible despite a weak peso, The Wall Street Journal reported. In its quarterly inflation report, the Bank of Mexico slashed its growth estimate to between 1.7% and 2.5% from the previous range of 2% to 3%. If the estimate proves right, it would be a hard blow for President Enrique Peña Nieto. The midpoint of the latest estimate—2.1% growth—means Latin America’s second-largest economy would expand this year at the same pace as in 2014.

Whenever China’s economy swooned in recent downturns, its currency never buckled. It held steady, or strengthened, even as China’s neighbors or trading partners scrambled to cut the value of their own currencies to deal with the fallout, the International New York Times reported. With the Chinese renminbi now taking its biggest plunge in decades, the worry is that the country’s already slowing economy is even worse off and the government is panicking. By the official measures, the economy is growing at 7 percent, right in line with government targets.

Solid Energy has confirmed it is going into voluntary administration, Stuff.co.nz reported. The state-owned coal company met staff at various sites including the West Coast, Southland and Waikato on Thursday morning, before confirming the news to media in Christchurch at midday. On Thursday, acting chairman Andy Coupe said the board had been considering options since last year due to the "significant" challenges the company was facing. He acknowledged the "very substantial effort" all employees had made over the past few years, but it had not been enough.

Greece and its creditors agreed on terms of a new bailout for the country, which, if ratified by other eurozone governments, could unlock up to €86 billion ($94.76 billion) in financing over the next three years, The Wall Street Journal reported. The deal would still leave Greece grasping for economic and political stability. More than six months of often-turbulent negotiations on the country’s future in the eurozone have dragged its economy back into recession. Its banks remain subject to severe capital controls.

The Co-operative Bank will not be fined for failings that helped push the bank to the brink of collapse before it was bailed out by bondholders, Britain’s financial regulators said on Tuesday, the Irish Times reported. Instead capital should be preserved to bolster its battered balance sheet, the Financial Conduct Authority (FCA) said. Co-op Bank is trying to recover from its near-collapse in 2013, when it was hit by a yawning hole in its finances, a drugs scandal, an exodus of top executives and losses from bad commercial real estate loans.

Emerging market private sector debt has surged by an “enormous” 33 per cent of gross domestic product since the global financial crisis, heightening the risk of financial crises, according to new analysis by JPMorgan, the Financial Times reported. The findings come amid mounting expectations that the US Federal Reserve is drawing close to its first rate rise since the crisis, a move many fear many reduce capital flows to emerging markets, potentially raising borrowing costs even if central banks do not raise policy rates in order to defend their currencies.