HIGHLIGHTS OF THE WEEK – Oct. 1

United States

• The Fed’s passing on interest rate hikes last Thursday did little to boost financial markets this week, with investors focused more on the downside risks to economic growth.

• An illuminating speech by Fed Chair Janet Yellen on Thursday helped shed some clarity on the Fed’s intentions. She stated that the FOMC did not expect the impact of foreign developments on the U.S. economy to be large enough to have a significant effect on the path for policy. She also added that her and her colleagues expected to proceed with a first rate hike later this year.

• The vote of confidence on the part of Yellen contributed to equity market gains on Friday. This was reaffirmed by the third estimate of second quarter GDP, which showed the economy in better health, with growth revised up from 3.7% to 3.9%.

Canada

• The Canadian dollar slipped below 75 US cents for the first time in 11 years this week. The loonie has fallen by nearly 20% since peaking in mid-2014.

• Retail sales rose 0.5% (m/m) in July, propped up by higher prices. In real terms, sales were up by a more modest 0.2%.

• Average hourly earnings data released this week highlighted the divergence throughout the Canadian economy, with the oil-rich provinces extending the downtrend that has been in place since the start of the year.

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 
[email protected]