TD/ Canada Trust Economic Highlights – February 21


United States
• Despite heightened political uncertainty it was another good week in equity markets, with the three U.S.
benchmarks reaching peaks mid-week before retracing somewhat ahead of the weekend.
• U.S. data came in well above expectations with survey indicators from the NFIB, as well as the New York
and Philly Federal Reserve Banks rising to multi-year highs. The optimism was also prevalent across
harder data, with retail sales as well as consumer and producer inflation metrics surprising to the upside.
• Together with the stronger data, Chair Yellen’s testimony where she indicated it “unwise” to wait too long
to remove accommodation, boosted the odds of a March hike. Nevertheless, we continue to anticipate
the Fed will wait until mid-year to raise rates next.

• It was a busy week for the jet-setting Canadian Prime Minister with stops in Washington D.C. and Europe.
In both cases, trade was on the agenda. Canada received some reassurance from the U.S. President
on the strength of the relationship between the two countries, but he also noted that NAFTA would be
• In Europe, the approval of the free-trade deal between Canada and the European Union by the European
Parliament, the agreement has passed another important hurdle. The deal will eliminate tariffs on 99% of
trade between the jurisdictions and should help to diversify Canada’s trade.
• Canada’s housing market is showing some signs of slowing down, especially in terms of home sales.
Nonetheless, tight supply in Canada’s hottest markets have kept upward pressure on prices, which are
up over 20% year-on-year.

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