TD / Canada Trust Weekly Economic Highlights – Aug. 27


United States

  • It has been a fairly light week on the economic news front, with only a handful of domestic second-tier data releases. Investors continued to look for signals regarding QE tapering; however, sparse amount of new data left financial markets somewhat volatile.
  • The FOMC minutes from July 30-31 meeting was the highlight of the week. The minutes contained a decidedly more dovish assessment of the economy. They also revealed a broader support for tapering later this year; however, there was still no clarity on the precise timeline.
  • Next week should offer a few more signals regarding underlying economic momentum, with the second estimate of Q2 GDP growth and the PCE deflator on deck.


  • The Canadian dollar has depreciated by over two U.S. cents since late last week. The anticipated September taper south of the border as well as a string of negative economic readings have all contributed to a lower loonie.
  • Canadian retail sales dropped 0.6% (m/m) in June, following a strong 1.8% gain in May. In real terms, sales were down an even larger 1.2%. Temporary disruptions related to the flooding in Alberta and construction strike in Québec contributed to the June decline.
  • Canadian wholesale sales fell 2.8% (m/m) in June, well below the consensus which called for a more moderate 0.5% decline. Inventories increased by 0.8%, which marks the fifth increase in six months.
  • The consumer price index (CPI) inched up 1.3% (y/y) in July, from 1.2% in June. The core measure of inflation also came in 0.1 points higher in July at 1.4%, well below the Bank of Canada’s 2.0% target.

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