This Week’s Economic Highlights – May 31

TD Canada Trust provides a weekly economic highlight report that we choose to share with our clients and those who follow us. This is an easy place to stay current on the broader economic conditions in Canada and the U.S. so that you are better informed to make stronger decisions around your own real estate investments. We are always available to answer any questions or walk through your real estate investment goals for now or in the future.

Full Details of the TD Canada Trust Economic Highlights Here

Canadian Highlights

  • Trade-related risk-off sentiment weighed on Canadian financial markets this week, with the S&P/TSX Composite down more than 1% and WTI oil prices falling more than 5%.
  • Statistics Canada’s GDP release confirmed that the Canadian economy hit a soft patch in Q1, with GDP up a modest 0.4% (annualized). Nevertheless, details of the report point to improving momentum heading into Q2.
  • The Bank of Canada kept its overnight rate on hold at 1.75%, as expected, with its communication offering a relatively constructive tone on the back of improving domestic data, but weighing the latter against elevated global trade uncertainty.

U.S. Highlights

  • U.S.-China trade tensions continued to dominate headlines as both countries dig in for another round of negotiations under more strained circumstances. U.S. tariffs against Mexico appear to also be in the works.
  • As trade tensions flare, investors have run for cover, driving up bond prices and sending the yield curve into inversion territory.
  • U.S. Q1 growth was revised marginally lower (3.1% vs. 3.2%), and Q2 is projected to be lower still (below 2%). Inflation however managed to edge marginally higher with core PCE at 1.6% year-on-year in April.