TD/ Canada Trust Economic Highlights – November 28


United States
• U.S. stock markets continued to rise, with all three major indices reaching record highs. Economic data
on the domestic front was generally constructive, with a number of indicators surprising to the upside.
• The Fed minutes released this week confirmed what many already believed, mainly that the economy is
making progress and that a rate hike is likely to come ‘relatively soon’. The market is now fully pricing in
a rate hike in December.
• With limited details on the scope and timing of fiscal policy, the path of interest rates beyond December
is perhaps even more uncertain in the election’s aftermath.

• Longer-term Canadian interest rates remained elevated, sitting near year-ago levels. The gain can be
attributed to events south of the border, where expectations of rising government spending and inflation
have pushed rates higher, taking Canadian yields along for the ride.
• Higher yields come as the Canadian economy continues struggling to find its footing. Indications are that
the economy is likely to return to a plodding pace of growth once the transitory boost from post-wildfire
activity has faded.
• A slower pace of growth and heightened uncertainty in the post-U.S. election period both point to an
economy that has devolved from a rotation of growth to simply searching for growth. As such, the likelihood
of further Bank of Canada easing in 2017 has risen.

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