TD / Canada Trust Weekly Economic Highlights – May 6


United States

  • Economic news out of the U.S. this week provided a pleasant contrast to the lingering worries surrounding the global growth outlook.
  • Strong consumer spending and rising consumer confidence, as well as a decent manufacturing survey, served as prologue for today’s better-than-expected April payrolls report.
  • Equity markets both at home and abroad caught the refreshing wind on their sails and were trading between 2 and 3% higher with respect to last Friday at the time of writing.


  • Yesterday afternoon, Stephen Poloz was selected to be the new Governor of the Bank of Canada. He will inherit the job from outgoing Governor Mark Carney. In overnight trading, market reaction was mixed and questions arose about the future course of monetary policy in Canada, although uncertainty has since eased this morning.
  • The challenges presented to Poloz on his first day in the office will be the same ones outgoing Governor Carney has been grappling with for some time: modest global and Canadian economic growth, benign inflation, and domestic risks surrounding household indebtedness and home price overvaluation.
  • There are no obvious policy implications from the upcoming changing of the guards. The central bank is not a one person operation. Instead, several senior officials influence the direction of interest rates. Many factors go into making interest rate decisions, including economic indicators and the risks present. In turn, our interest rate forecast remains the same – the next move in interest rates should be up, with hikes set to resume at the end of 2014.

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]