Weekly Economic Update

For the week of October 30 – November 3.

In the Canadian economic data docket this week, we will see two big releases: August GDP figures and October employment numbers. After increasing 3.8 percent year-over-year in July, consensus is for a 3.5 percent increase for August. Month-over-month GDP expectations are for a slight advance of 0.1 percent versus flat growth a month prior. On the employment front, the economy is expected to have added 15k in jobs in October versus the 10k created in September. Consensus for the unemployment rate remains at 6.2 percent, unchanged from the prior month.

Lots of data is scheduled to be released in the US this week. Personal spending and income figures will be out this morning. By mid-week, ISM manufacturing will be released as well as the FOMC’s rate decision. Consensus is for the Fed to keep rates unchanged at 1.00-1.25 percent. Wrapping up the week, the US will also release its employment numbers as well as other manufacturing figures. After losing 33k in jobs in September, the US economy is expected to add 310k in October. The unemployment rate is expected to remain unchanged at 4.2 percent.

The TSX closed at a record high on Friday at 15,953.51, now up 4.4 percent on the year, as the Bank of Canada continued to talk down rate hike expectations. According to a Bloomberg survey, many economists that once called for another rate hike before the end of the year now see this rate hike pushed into next year. Canadian yields have fallen another basis point across the curve this morning. The Canadian dollar slipped below 78 US cents this morning and is down from the high of 82.6 US cents back on September 11 (closing level).

Today’s expected range trading range for the Canadian dollar is 1.279 – 1.289.

Source: Bloomberg

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