HIGHLIGHTS OF THE WEEK – March 26
• A light data week globally resulted in relative calm in financial markets. Despite jawboning this week by Federal Reserve presidents, investors remain unconvinced that the Fed will raise rates at the pace revealed in last week’s FOMC economic projections.
• The few data releases this week suggest some downside risk to near-term economic momentum.
• Our updated March Quarterly Economic Forecast expects modest U.S. economic growth of 2.0% and 2.3% in 2016 and 2017 respectively. Global GDP growth is forecast at 3.1% and 3.4% for 2016 and 2017 respectively.
• All eyes were on Ottawa this week as the new government unveiled its first budget. Deficits of roughly $30 billion are due in coming years, with about half the borrowing resulting from new government spending plans.
• In addition to tax changes and the new Canada Child Benefit, sizeable spending is planned for affordable and seniors’ housing, federal infrastructure, indigenous peoples, and public transit. These commitments total more than $27 billion over two years.
• Government spending, together with robust near-term economic momentum, have led us to upgrade our growth outlook for Canada. Real GDP is expected to grow by 1.9% this year, ticking up to 2.0% growth in 2017.
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