TD/ Canada Trust Economic Highlights – December 12


United States
• Domestic data took a backseat to this week’s developments out of Europe with major political developments
in Italy early in the week.
• On Thursday, the ECB revealed a reduction to its monthly asset purchases beginning in April of next
year. The move was applauded by markets and seen as a dovish taper with ECB President Mario Draghi
making it clear that this was a one-time adjustment and not a tapering down to zero.
• Data out of the U.S. did less to move markets, but continued to paint a picture of a solid domestic economy.
With the much anticipated December FOMC meeting just around the corner, we are almost certain that
the Fed will continue along its “gradual” hiking path come next Wednesday.

• The Bank of Canada left its overnight rate on hold at 1/2 per cent this week. The central bank noted the
improvement in global growth, but balanced this with a reference to elevated uncertainty and its detrimental
impact on Canadian and global investment.
• In contrast to the United States, Canada’s economy continues to be characterized by a significant degree
of economic slack that will keep downward pressure on inflation and leave policy rates on hold long after
the Federal Reserve has pushed rates higher.
• With modest economic growth over and considerable uncertainty, the pressure will remain on both fiscal
and monetary authorities to keep the pedal to the metal to support the Canadian economy.

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