HIGHLIGHTS OF THE WEEK – April 8
• Chair Yellen’s speech on Wednesday, while containing many of the recent ‘Fedspeak’ elements, struck a dovish tone, emphasizing global risks, policy asymmetry, and unease over low inflation expectations. Upside risks were mentioned but did not appear as burning concerns.
• Global PMIs were broadly improved in March. Chinese manufacturing indices rose, albeit they remain on the cusp of growth and contraction. Eurozone manufacturing PMIs also showed broad based strength. U.S. ISM surprised to the upside as well, with the sector expanding after four months of contraction.
• The March U.S. employment report was very healthy, with the economy adding 215 thousand jobs and wages up by 0.3% on the month. The jobless rate ticked up to 5%, as Americans rejoined the labor force en masse – also a very positive development
• Canadian monthly GDP jumped an robust 0.6% in January. Adding to strong readings at the end of 2015, this puts first quarter growth on track for an impressive 3% annualized gain.
• Nonetheless, more recent data on business confidence confirmed that the economic backdrop remains subdued overall for Canadian businesses. The CFIB Business Barometer fell to a new post-recession low in March.
• The Bank of Canada’s Business Outlook Survey also showed that business sentiment on future sales prospects remain subdued. Encouragingly, there was a modest improvement in intentions to hire new staff and invest in new equipment, but these readings also remain at low levels.
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