HIGHLIGHTS OF THE WEEK – June 4
United States
- Equity markets experienced slight gains on the week and bond markets sold off as optimism about the economic recovery pulled forward expectations of Fed exit from QE.
- The U.S. economy grew by 2.4% in the first quarter of 2013, revised down from an initial estimate of 2.5%. Despite the downward revision, the details were growth positive for the second quarter, showing stronger private demand and weaker inventory accumulation.
- The Chicago PMI bounced back with a vengeance in May to 58.7 from 49.0 in April, suggesting further upside to manufacturing activity and economic growth in the second quarter.
Canada
- Bank of Canada Governor Carney delivered his last interest rate decision this week before he heads off to England. The central Bank held both the overnight rate and forward looking communication unchanged.
- This week’s release of Q1 2013 national accounts showed that real GDP advanced by 2.5% annualized in the quarter. More importantly, the drivers of growth are becoming more balanced between domestic spending and exports.
- The Bank of Canada is likely to continue to manage the transition to more export led growth by keeping monetary policy accommodative. Low interest rates and an improving U.S. recovery will continue to support average quarterly Canadian real GDP gains in the range of 2 to 2.5% over the rest of the year.
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
