Weekly Economic Update

For the week of January 23 – 28

The Bank of Japan’s Haruhiko Kuroda has a rosy view of the economy, and much of it has to do with the new policies expected from the United States under Donald Trump. Unlike the heads of many other central banks, Kuroda doesn’t believe that Trump’s bias toward protectionist trade will hurt the global outlook. Although he does agree that protectionist trade hurts global growth, he believes that major economies understand the importance of trade, and that the United States will likely not take this protectionist stance. The Canadian government has said they would be willing to negotiate bilateral trade agreements with Mexico in the case that trilateral trade agreements including the United States under the NAFTA agreement are not sufficient. Concerns rose after Trump’s speech in which “America First” was a focal point.

118353675Markets have reacted poorly to Donald Trump’s presidency as there has been little further mention toward infrastructure spending. Investors will continue to study the president’s actions in order to gain a better understanding of how the next four years will likely play out.

Oil prices are down as the number of active rigs in the United States continues to rise. Prices are currently down by 1.33% after gaining over 2% on Friday. The Canadian dollar is trading up against the U.S. dollar this morning. Today’s expected range is 1.3240 – 1.3340.

With little economic data expected out of Canada this week, focus will be on the United States, which is expecting releases for Manufacturing PMI, Wholesale Inventories, New home sales, GDP, University of Michigan Sentiment, Personal income, and Personal spending.

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