Highlights of the Week – October 30/17
• U.S. equities this week managed to recover from earlier losses following strong earnings and a series of upbeat economic data. Durable goods orders and new home sales surprised to the upside, while the House approved a budget plan, adding to the upbeat tone.
• The advance estimate for third quarter GDP growth of 3% (annualized) came in better than expected despite hurricane impacts weighing on domestic demand.
• The ECB announced a reduction in its pace of asset purchases and extended its bond-buying program through September 2018 or beyond if necessary, acting to affirm a growing policy divergence between the ECB and the Fed.
• Economic data was generally constructive this week, with wholesale trade up in August and a solid payrolls report.
• Finance Minister Morneau delivered his fall economic and fiscal update, which sees an improved budget balance resulting from recent strong economic growth. He elected to ‘split the difference’, with about one-third of the gain used for new initiatives and the remainder allowed to flow through to a reduced deficit profile.
• The Bank of Canada maintained its policy rate at 1.00%. The accompanying discussion took a dovish bent, but the growth outlook remains consistent with further monetary tightening. ‘Data dependency’ likely means that the Bank will seek confirmation of the growth path before further tightening, making January 2018 the most likely trigger point for another hike.
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