TD/ Canada Trust Economic Highlights – Oct 15


United States

  • The minutes from the Federal Reserve’s September meeting released this week reiterated that members’ concern for the underperformance in inflation was the main consideration in their decision to hold off on raising rates.
  • While the message was perceived as dovish by financial markets, the minutes also reinforced that the majority of Fed members still see a 2015 liftoff to interest rates. Futures markets, on the other hand, see rates on hold until March of next year.
  • Some of the pessimism on the U.S. economy due to global influences appears to be overstated. As long as domestic demand remains relatively robust, the job market will continue to improve, inflation will continue to inch higher, and the Fed will begin to raise interest rates.


  • Markets were a bit more confident over the past week, but it wasn’t a made-in-Canada story, with economic data middling at best. Volatility is down, oil prices (WTI) are back around $50/bbl, and the Canadian dollar has gained a step alongside other commodity currencies.
  • On the employment front, Canada has gained more jobs that it has lost so far in 2015, but not enough to keep pace with the labour force. The industry details put the blame on the oil-driven downturn, which has lifted the unemployment rate to 7.1% from 6.6% back in January.
  • Canada also signed on to the Trans-Pacific Partnership trade agreement this week, which is good news for our small open economy that relies on trade to support economic growth. On that score, the August trade numbers may have looked a little disheartening, with Canada’s trade deficit worsening to $2.5B. The weakness was largely due to lower oil prices, while the volume of exports held up better.

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