HIGHLIGHTS OF THE WEEK – Feb 22
United States
• Risk assets were in demand again this week after several weeks of being shunned. Global markets will close up this week and U.S. Treasuries sold off although low yields still signal market unease. Oil is holding on to last week’s rally as the dollar weakened marginally against its major trading partners.
• The FOMC minutes from its January meeting confirms that global growth concerns and financial market turmoil will likely act to slow the pace of rate normalization. Having said that, the U.S. economy remains on a solid expansionary path, and we expect the Fed will still deliver two more quarter-point hikes later this year.
• U.S. data for this holiday week did not materially change our outlook. If anything, the inflation report this morning reaffirms the FOMC’s intent to commence its tightening cycle later this year.
Canada
• It was a mixed bag of economic data for investors to digest this week. Manufacturing and wholesales sales were up 1.3% and 1.8% respectively in volume terms, providing some momentum heading into 2016. Retail sales, however, were disappointing, with volumes falling by 2.3%.
• The housing market remained hot in January, with existing home sales up 8% y/y, and average prices up 17% y/y.
• Russia, Saudi Arabia and a few other OPEC countries came to an agreement to freeze oil production levels so long as other producers agree to do the same. However, even if the agreement is implemented, it is unlikely to have a major impact on market balance or prices.
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
John.Maveety@td.com
