HIGHLIGHTS OF THE WEEK – May 30th
• Markets kicked the week off in good spirits. Sentiment was boosted by a fresh batch of positive U.S. housing data, a rise in oil prices to the $50/barrel ‘sweet-spot,’ and news that Greece struck a deal with its international creditors.
• Sales of new single-family homes surged by 16.5% m/m in April, while the forward-looking pending home sales index climbed by 5.1% m/m in April, pointing to robust home buying activity in Q2. As expected, Q1 GDP growth was revised higher to 0.8% (annualized), suggesting that the quarterly performance, while weak, was not-so-bad.
• Encouraged by upbeat economic data, Fed speakers continued to communicate with a hawkish bias, already highlighted in last week’s FOMC minutes, stoking market expectations for a near-term rate hike.
• Even though markets were in a good mood, the Canadian economic data and the communique from the Bank of Canada were a bit more disappointing.
• Corporate profits contracted yet again in Q1, as losses continued in oil and gas, and the picture in the rest of corporate Canada isn’t great either. Small businesses were also a little less optimistic in May.
• Next week sees the release of Q1 GDP data, where the economy likely expanded at a healthy 2.7% pace. However, that momentum faded at the end of the quarter, setting Q2 up for a weak showing even before the effects of the wildfires are worked in.
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