TD/ Canada Trust Economic Highlights – January 16


United States
• Financial markets this week were captivated by policy-related tweets and a mid-week press conference
by President-elect Donald Trump that, while entertaining, proved to be short on policy detail.
• Retail trade data this week was broadly in line with market expectations, although the monthly advance
was driven by increased purchases of autos and gasoline. Overall, the data remains consistent with our
view that consumer spending will continue to support economic activity in 2017.
• Promises from policymakers are nothing new, and are an important driver of consumer and business expectations.
However, the post-election euphoria may be premature. We remain hopeful that more policy
certainty will materialize after the inauguration next week.

• The Bank of Canada’s Business Outlook Survey pointed to continued improvement in the Canadian outlook,
as firms grew increasingly confident about Canada’s economic prospects. Similarly, housing starts
remained resilient in December, suggesting decent momentum in construction heading into 2017.
• For the Bank of Canada, the upcoming monetary policy decision will require balancing these positive
developments against a soft pace of inflation and heightened uncertainty post-U.S. election.
• Ultimately, the Bank of Canada is likely to leave its monetary policy interest rate at 0.50%, with communication
likely to emphasize the many reasons for maintaining this accommodative rate for some time to

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