TD / Canada Trust Weekly Economic Highlights – Jan 11


United States

  • Weak eurozone macroeconomic data is overshadowed by ECB comments pointing to the normalization of financial conditions in the region, while renewed focus on inflation effectively takes cuts off the table.
  • Japan’s new government introduces a ¥10.3 trillion stimulus package aimed at reflating the economy, while continuing to pressure the Bank of Japan to increase its inflation target to 2%.
  • Strong Chinese trade data for December seen as lowering probability of hard-landing lifts markets.
  • US trade deficit widens as imports outpace exports hampered by weak eurozone demand.


  • Deputy Governor of the Bank of Canada, Tiff Macklem, delivered a special lecture in which he reiterated the theme that sustainable economic growth in Canada must increasingly be driven by the export and business sector and less by residential investment and consumer spending.
  • That transition is already underway. Housing starts have slowed from the record levels hit earlier in 2012. We do expect the pace of construction to continue to gradually trend down to more sustainable levels over the next year as homebuilders take their cue from an already cooling existing home market.
  • Despite what is shaping up to be a weak end to the year, export growth is set to start contributing more to growth in the year ahead. Despite continued fiscal challenges stateside, U.S. demand is expected to be more of a boon to the Canadian export sector over the next year as improving housing markets and credit conditions help U.S. households and businesses unleash some pent-up demand. Increased business borrowing also suggests that businesses are poised to do more of the heavy lifting in the year ahead.

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

[email protected]