TD/ Canada Trust Economic Highlights – November 1


United States
• The odds of a rate increase in December have continued to climb higher this week, rising to about 75%
from 67.5% a week ago and 54% last month.
• Expectations were buoyed by hawkish Fedspeak and solid domestic data. Following declines in the prior
month, sales of new single-family homes and pending home sales both surprised to the upside in September.
Housing prices also continued to grow briskly in August, advancing by 5.3% y/y.
• U.S. GDP was the key data release of the week. Based on the advance estimate, the U.S. economic
momentum accelerated markedly in Q3, with GDP rising by a healthy 2.9% (SAAR).
• With near-term market expectations for monetary policy converging to those of the Fed and the economic
data remaining supportive, the FOMC will likely use next week’s statement to communicate its intentions
to raise rate in December.

• While thin on data, policymakers were busy this week. Rounding out the list of policy-related items: the
Bank of Canada left its inflation targeting framework largely unchanged; Finance Minister Morneau reignited
concerns about precarious employment; CETA was revived.
• The Canadian housing market is seemingly more overvalued than just a few months ago. Home price
growth will slow, with some markets likely to experience outright price declines.

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