HIGHLIGHTS OF THE WEEK – Feb 3
• The Federal Open Market Committee (FOMC) stood on the sidelines this week, raising concern over economic and financial developments globally. The tone of the statement was more dovish than expected, reducing the odds of a March hike.
• U.S. economic growth slowed in Q4, with the economy advancing by a meagre 0.7% q/q (annualized). Much of the drag on the headline number stemmed from weaker net exports and a continued drawdown in inventories, each subtracting 0.5 percentage points from the headline.
• Despite the apparent weakness, America’s domestic demand fundamentals remain relatively healthy. Home
sales in December picked up to an annualized 544k and initial jobless claims also came in lower at 278k for the week ending Jan 23.
• Canadian investors were finally able to catch their breath this week as oil prices “rebounded” back to the
mid-$30/bbl range. That gave a boost to both the TSX and the loonie.
• While the worst fears on global markets may have been calmed for now, news on the Canadian economy
didn’t provide a whole lot to cheer. The economy grew 0.3% in November, but it likely won’t be enough to
save quarterly growth from flatlining.
• The first Canadian data point for 2016 also showed that small businesses in Canada were increasingly pessimistic in January. A souring trend has been evident in the CFIB Business Barometer since the fall of 2014, and is likely to persist for a few months yet as the Canadian economy undergoes a difficult adjustment period.
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