HIGHLIGHTS OF THE WEEK – Sept. 5/13
- Markets were on edge as increased likelihood of U.S.-led action in Syria led to fears of a broader spillover in the region. A limited strike looks imminent, but fears of spillover subsided somewhat.
- U.S. real GDP was revised up by 0.8pp to 2.5% for Q2. But, details were less constructive, with the above 2% pace may not carry into the third quarter, especially in light of the disappointing reports on July durable orders and income & spending.
- Jobless claims fell which bodes well for next week’s payrolls report.
- The week’s mixed data is unlikely to materially alter the probability of a September-taper.
- The Canadian economy grew by 1.7% in Q2, on an annualized basis, roughly in line with what we were expecting. However, a downward revision to Q1 (2.2% from 2.5%) puts the average rate of economic expansion for the first half of the year at just under 2%.
- Also this week, we learned that Canada’s current account deficit widened to $14.6 billion in the second quarter. The deterioration was fairly broad-based, but was mostly driven by an increase in the deficit on trade in goods and relatively weak inflows in foreign portfolio investment.
- Corporate profits were also down by 0.8% in Q2 – weakness in the non-financial sector, particularly in the manufacturing sector, contributed to the headline decline.
- The second half of the 2013 looks more promising than the first for the Canadian economy. Optimism surrounding future prospects was foreshadowed by the Canadian small businesses barometer reading.
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