TD/ Canada Trust Economic Highlights – October 25


United States
• Stocks are poised to finish the week in positive territory for the first time in a month, helped by a good
start to earnings season which suggests the U.S. profit recession is likely coming to an end.
• U.S. data remains supportive of a near-term rate hike with wage pressures broadening. Speeches by
Fischer and Dudley this week suggest both are in favor of a rate hike this year given the current trajectory.
• The Chinese economy expanded 6.7% from a year ago in Q3, helping assuage fears that it is slowing
more abruptly than anticipated. Consumption and fixed investment supported growth while industrial
production disappointed. Despite the solid print, concerns about unsustainable credit growth remain.
• The ECB left policy rates and QE program framework unchanged this week, punting any policy refresh
to December. ECB President Draghi adamantly talked down any notions of near-term tapering of asset
purchases, emphasizing that policy will remain accommodative even after any eventual reduction in QE.

• The Bank of Canada left rates unchanged this week, but downgraded its forecast for economic growth in
2016 and 2017 on weaker housing activity and a softer export profile.
• Manufacturing sales jumped 0.9% in August, marking the third straight month of gains. Volumes shot up
by 1.2% during the month.
• Retail sales continued to struggle, slipping 0.1% in August, with volumes falling by an even larger 0.3%.
• Price pressures remain subdued, with headline inflation sitting at 1.3% in September and core inflation
at 1.8%.

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