TD/ Canada Trust Economic Highlights – March 7


United States

• Stronger than expected data out of the U.S. supported this week’s risk-on bias in global financial markets. Nonfarm payrolls took center stage at the end of the week adding 242k jobs in February.

• Expectation for further stimulus out of the Eurozone and China appeared increasingly likely, boosting global sentiment further ahead of China’s annual parliamentary sessions and the ECB’s monetary policy meeting next week.

• Though we are of the view that the Fed will remain on the sidelines on March 16th, the improving domestic backdrop supports our view that the Fed will continue on with its gradual tightening cycle in June.


• The release of Canadian national accounts showed a 0.8% (annualized) gain in Canadian real GDP in the fourth quarter, slightly better than the zero print expected by markets. Digging into the details, however, paints a more disappointing picture. Stripping away net trade, final domestic demand fell by 0.6% in the quarter.

• The good news stories were in the forward looking indicators. Monthly real GDP grew by 0.2% in December, providing a nice hand-off into the first quarter of 2016. Real exports in January grew 2.5%, and net trade is poised to provide a significant boost to economic growth. TD economics is now tracking an above 2% growth rate for real GDP in Q1 2016.

• The better-than-expected economic turnout in the end of the year is likely to keep the Bank of Canada on hold at next week’s interest rate decision.

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