HIGHLIGHTS OF THE WEEK – Nov 11
As the Fed stopped expanding its balance sheet, the ECB looks to take its balance sheet €1 trillion higher over the next two years, highlighting the increasingly diverging monetary policy paths of the Fed and BoE on one hand and ECB and BoJ on the other.
German exports and industrial production rebounded in September, after the large declines observed during August, and may shield the German economy from an outright contraction during Q3. Still, growth in the Eurozone remains sluggish with final PMIs for October remaining subdued.
U.S. economic data came in decidedly better. Trade figures disappointed for September, but ISM manufacturing and non-manufacturing indices remained elevated during October.
Most encouraging were the labor market indicators, with payrolls increasing by 214k (+31k in revisions), and the jobless rate improving further to 5.8% in October.
The Bank of Canada continued to sing its dovish tune this week as oil prices fell, and the loonie dropped below 88 cents U.S. for the first time in five years.
However, Canada’s trade and employment reports out this week shone a more positive light on Canada’s recent economic performance.
Canada’s back-to-back solid job growth is consistent with a nascent firming trend in the Canadian the labour market. However, the measures of underutilization highlighted by Governor Poloz remain, and it will take some time before the labour market is strong enough to warrant a rate hike.
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) 767-5442