HIGHLIGHTS OF THE WEEK – March 30
United States
- Manufacturing purchasing managers indexes for March came in below expectations in Japan and China, but above expectations in Europe. The positive PMI release follows a string of other positive data out of Europe, increasing confidence for a much-awaited rebound in the euro area economy.
- Consumer price inflation data for February showed that both core and headline inflation rose 0.2% M/M. Prices are no longer officially falling as headline inflation picked up to 0.0% Y/Y, while the core measure edged up to 1.7% from 1.6%. The rebound in price growth could prove to be a false dawn, however, with price growth expected to remain subdued over the near-future.
- Geopolitical events in the Middle East led to a bounce in oil prices, with WTI breaching the $50 per barrel mark. However, the oversupply in oil shows no sign of abating, as U.S. production continues to rise, leading to another jump in inventories this week.
Canada
- In what was otherwise a quiet week for economic data in Canada, the price of oil, as measured by WTI, jumped back up above US$50 per barrel. That said, the overall collapse in oil prices has turned the usual provincial fiscal order topsy-turvy.
- Provincial budget season is in full swing, with two provinces releasing their 2015-16 fiscal plans this week. Wealthy Alberta is slated to post a $5 billion deficit this year, and is bringing in a slew of tax and fee increases. Meanwhile, Quebec is planning to be in the black for the first time in seven years.
- The oil price collapse has also driven a wedge in business sentiment across Canada. Oil-dependent provinces continued to see sentiment slip, while oil consumers are becoming more optimistic.
John Maveety
Manager, Residential Mortgages – Greater Ottawa Area
TD Canada Trust
T: (613) 371-1984 F: (888) 899-1984 P: (866) 767-5446
