TD/Canada Trust Economic Highlights – Oct. 27


           United States

  • Following last week’s turbulence, a sense of normalcy returned to financial markets this week. Volatility subsided, with the VIX falling by nearly 50% from its peak last Wednesday, and demand for safe-haven Treasuries easing. Equity markets rebounded, with the S&P gaining 3.9% relative to last Friday.

  • Considering the magnitude of the swings in market sentiment, it is notable how little economic momentum has changed. International data out this week continued to point to a modest global economic backdrop. Meanwhile incoming U.S. data suggest that economic recovery remains in-tact.

  • Coming on the heels of last week’s increase in U.S. housing starts and building permits, existing home sales similarly surprised to the upside this week, staying above 5-million mark for the fourth consecutive month. Sales of new homes came in flat relative to a month earlier, but were still up 17% year-over-year.


  • Canadian markets recovered from last week’s poor performance, with both the S&P/TSX composite index and the dollar up relative to last Friday’s close.

  • The focus this week was on the release of the Bank of Canada’s Monetary Policy Report. Despite some changes in language, the report was largely ‘business as usual’. The policy rate is still expected to remain at its current level until the second half of next year.

  • Although the quarter began with some positive data releases, the third quarter data flow has been disap­pointing thus far. Consequently, we presently expect GDP growth for the quarter to come in at around 2.5%, below our initial expectations for growth in the 3% range.

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