The third quarter of 2016 gave us further indication of the diverging trends taking hold in the US and Canadian economies leading to a divergence in their respective monetary policy stance.

The US economy continued to grow, albeit at low-to-moderate growth, driven primarily by strong consumer spending. While business investments have been largely non-existent/detractor to growth for the past few quarters, we believe that a stabilization in commodity prices should see this trend reverse in the coming quarters. Various inflation measures still remain below the 2% target level while employment numbers have been strong bringing the US closer to full employment.