TORONTO, July 12, 2019 /CNW/ - Scotiabank Economics today
published its Q3 Global Economic Outlookreport. This comprehensive
report shows the ongoing and increasing negative impact of the
protracted trade war on economic activity in the US and across the
globe.
"Following two years of fiscally-induced sugar highs, the US
economy is slowing rapidly as that stimulus wanes and Trump's trade
policies, threats, and bluffs begin to weigh on US economic
activity," said Jean-François Perrault, Senior Vice President and
Chief Economist at Scotiabank. "Markets are now convinced that the
Federal Reserve will cut rates to offset some of these shocks,
boost inflation, and insure against possible future damages caused
by the President's interventions.
"We believe the Bank of Canada
is unlikely to follow the Fed as it cuts rates," he continued.
"Canada is a Northern Star and we
expect Canadian growth to outpace that of the US for the remainder
of the year."
Highlights of Scotiabank's Global Outlook include:
- Canada: Growth is
rebounding strongly following the softpatch, with growth expected
to exceed that of the US for the remainder of the year. The Bank of
Canada is expected to keep rates
at current levels.
- United States: The
Federal Reserve will but rates by 75 bps this year as it tries to
raise inflation and takes out some insurance against headwinds to
growth.
- United Kingdom: GDP
growth will remain weak through 2019 and 2020 as rising Brexit and
global trade risks continue to depress business
investment
- Eurozone: Will post its slowest economic expansion in
five years amid decelerating global growth and heightened trade
risks owing to the White House's protectionist policies.
- Mexico: Growth to fall
below 1% in 2019 owing to domestic policy challenges and global
trade uncertainties.
- China: Economic growth
will continue to slow gradually as both domestic and external
demand dynamics soften
- Commodities: Industrial metals will benefit from
improving economic sentiment while strong US production growth is
expected to keep WTI oil prices rangebound in the mid-$50s/bbl and
gold gets a boost from weaker rate expectations.
Read Scotiabank's Global Outlook online here.
Scotiabank provides clients with in-depth research into the
factors shaping the outlook for Canada and the global economy, including
macroeconomic developments, currency and capital market trends,
commodity and industry performance, as well as monetary, fiscal and
public policy issues. Follow this research on Twitter at
@ScotiaEconomics.
About Scotiabank
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leading financial services provider in the Americas. We are
dedicated to helping our more than 25 million customers become
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over $1 trillion (as at April 30, 2019), Scotiabank
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SOURCE Scotiabank