TD/Canada Trust Economic Highlights – Feb 2


       United States

  • Volatility remained the main theme across global financial markets this week, as a series of international events, a some­what dovish-interpreted FOMC statement, and choppy earnings reports all helped to move investor sentiment. Both the S&P500 and DJ30 pulled back on the week, falling by 2.6 and 2.7%, respectively.

  • The anti-austerity Syriza party secured a momentous victory in Sunday’s Greek elections, coming just two seats shy of an outright majority. The win and Syriza’s coalition with the right-wing anti-austerity party was enough to resurface longstanding fears of a potential default on Greece’s debt obligations, sending yields on Greece’s short-term borrowing costs to their highest level since late 2012.

  • The fourth quarter advanced estimate of U.S. real GDP disappointed, coming in at 2.6% (annualized) – much lower than the consensus forecast of 3.0%. While the underlying details were mixed, consumer spending posted its largest gain in almost nine years, rising by 4.3%.


  • The Canadian dollar hit a new low this week, ending the week a little under US$0.79, as financial markets continue to price in a further rate cut by the Bank of Canada, just as the Fed is getting ready to lift rates.

  • The data this week continued to feed pessimism. Real economic output fell 0.2% in November and the decline was broad based across most sectors. Meanwhile, Statistics Canada released revisions the labour force data, which showed job creation was much slower in 2014 than previously thought.

  • Going forward, TD Economics estimates that Canadian economic growth will decelerate sharply in the first half of the year as the recent plunge in oil prices hurts commodity producing regions. However, as the year progresses, a depre­ciating Canadian dollar, robust U.S. economic growth.

For further information, please contact:

John Maveety Manager, Residential Mortgages – Greater Ottawa Area TD Canada Trust
T: (613) 371-1984 F: (888) 899-1984 P: (866) 767-5442