TD / Canada Trust Economic Highlights – Feb 24


United States

  • Financial markets are ending the week on a positive note, with the majority of global stock markets trading higher than last Friday, and U.S. Treasury yields also marginally higher.
  • The S&P 500 is on track to secure a gain of 0.9% on the week, as investors have prioritized the strength in some indicators – such as Markit’s U.S. manufacturing PMI index – over the weakness in housing activity, which has been partly attributed to bad weather.
  • Other factors boosting the positive risk sentiment this week included the confirmation from the FOMC January meeting minutes that the Fed is committed to its tapering course and a soft U.S. inflation report.


  • Despite a decent week for equities and commodities, the Loonie fell back out of favour this week. The Canadian dollar’s decline has more to do with Canada’s relative economic underperformance lately, rather than its oft-touted links to commodity prices.
  • That underperformance is expected to have continued in Q4, when GDP data are released next Friday, Canada’s solid 2.4% growth pales next to the 3.2% gain seen in the United States (see preview on page 5). Moreover, much of Canada’s fourth quarter growth came early in the quarter, with extreme weather in December denting growth and providing very poor momentum heading into 2014.
  • Canadian inflation ticked up in January, a trend we expect to gradually continue in the coming months. As economic slack is absorbed and a weaker Canadian dollar percolates through to prices at the retail level, overall inflation should be pushed higher.

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) 767-5446