Economic Outlook

Text/HTML

Monthly Economic Outlook Webcast 

Monthly Economic Outlook Webcast   

An enthusiastic start to 2017 - January 2017

Eric Lascelles, Chief Economist, RBC Global Asset Management, shares the latest views on the global economy and offers insight into today’s economic issues.

Key Highlights:

  • Slightly better growth is forecasted for 2017, supported by: robust global leading indicators, higher earnings and the equity rally, and growing consumer spending in China. However, even though recession risk is down, economic challenges remain. Populism is growing and political risks remain high. RBC Global Asset Management (RBC GAM) thinks the markets may be failing to acknowledge some post-election challenges.

  • Markets strengthened significantly after the U.S. election and stocks are up around the world. Bond yields have risen, representing increasing investor risk appetite, and investment-grade and high-yield spreads have narrowed – both constructive outcomes.

  • The U.S. dollar has strengthened against most currencies, which can be attributed to: a positive economic outlook, the U.S. Federal Reserve (Fed) raising rates while other central banks are cutting, and a longer-term secular trend that sees the U.S. dollar rising consistently for around five to 10 years. Currently, we're nearing the five- or six-year mark.

  • The immediate future of U.S. retail spending – a key driver of the country's economic growth – looks promising, with consumer confidence the highest it has been during this cycle. Job creation and wage growth have picked up as the economy has strengthened. Moreover, wealth growth has been impressive and credit growth has also been strong.

  • U.S. crude oil production is on the rise, allowing it to remain a true swing producer. But OPEC and non-OPEC nations have battled back by pledging to cut production, showing that OPEC still has capacity to sway the direction of the market. RBC GAM sees a potential shortage of oil in 2017, but believes that U.S. shale producers will quickly fill the gap, settling prices over time.

  • Chinese consumer activities have rebounded – especially motor vehicle sales – reflecting a newly invigorated Chinese consumer. From a structural standpoint this is good news, as China is seeking to shift from an investment-driven to a consumption-driven economy. However, RBC GAM believes a big part of this trend can be attributed to how China's latest monetary stimulus has been targeted.

  • In Canada, the extreme economic disparities between the country's regions, largely driven by the oil price decline, are beginning to shrink. British Columbia, Ontario and Quebec are leading the way on growth, buoyed by a weak Canadian dollar (which helps exports), low oil prices and a resurging U.S. economy. Alberta, Saskatchewan and Newfoundland and Labrador, the more resource-oriented provinces, are still suffering.

The webcast includes an audio and slide presentation.

Text/HTML
Eric Lascelles, Chief Economist, RBC Global Asset Management, shares the latest views on the global economy and offers insight into today’s economic issues.

Text/HTML
Disclaimer
 

To speak with an Investment Funds Advisor:
Call us at 1.800.661.6141 or
email us at info@phn.com