TD/ Canada Trust Economic Highlights – March 6


United States
• It was an exciting week in markets this week, with plenty of domestic and international first-tier data,
central bank communication, and the inaugural presidential address to Congress.
• International data has continued to paint a relatively bright picture of the world economy with inflation
picking up in the Eurozone, Japan, and the U.K. The positive sentiment was further buoyed by strong PMI
data across the globe, suggestive of a strong start to 2017.
• U.S. data was even more encouraging. Apart from some weakness in real spending and construction in
January, which came on the back of a strong fourth-quarter, data on from purchasing managers pointed
to building strength, with solid momentum in early-2017 also exhibited by regional business surveys, price
metrics, and labor market indicators.
• In light of the strong data flow and increasingly hawkish rhetoric out of the Fed, we believe the FOMC will
likely raise rates at its next meeting in mid-March, barring any downside surprises, with markets increasingly
turning their focus from “when” to “how quickly” any potential hikes may come.

• Canadian real GDP beat most forecasters expectations, rising 2.6% annualized in the fourth quarter of
2016 and has considerable momentum heading into 2017.
• To no one’s surprise, The Bank of Canada remained on hold yet again. While the economy is likely to
beat the expectations laid out in the January MPR, the central bank has plenty of reasons to hold on to
their dovish tone.

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