HIGHLIGHTS OF THE WEEK – March 23
- The economic highlight of the week was the eagerly-awaited FOMC meeting. As expected, the central bank eliminated patience from its statement; however this was more than offset by a downgraded growth outlook and lower expectations on the future trajectory of the federal funds rate.
- Markets responded positively to the Fed’s dovishness – both equity and bond indexes rallied, while the dollar sold off.
- The surging U.S. dollar was the main reason behind the Fed’s downward revision to this year’s growth though harsh winter weather has also played a role. This was re-affirmed this week by a lackluster housing starts report, that showed a decline of 17% to 897k annualized units.
- WTI crude oil prices hit a fresh 6-year low of US$43 per barrel this week, as markets are beginning to focus on bulging inventories and lack of available storage capacity in the US.
- Manufacturing sales sank 1.7% in January – driven largely by petroleum products. Volumes were down by a more modest 1.0%.
- Retail sales were also down 1.7% in January, due to lower gasoline station receipts. In real terms, sales slid by a still significant 1.2% during the month.
- Lower gas prices continue to weigh on headline inflation, which clocked in at 1.0% y/y in February. However, the weaker Canadian dollar has provided some offset, helping to keep core inflation slightly above the Bank of Canada’s 2% target.
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