There was a lot of news this week on important topics such as Brexit, China, impeachment and Facebook. But we also saw an important election take place just over our northern border: Canadian Prime Minister Justin Trudeau emerged with a fairly stable government, although he will be governing in a minority parliament that will require him to seek support from other parties to pass legislation. The election was reported in the U.S. media but given everything else going on, it didn't make many waves.
The same is true for the Canadian economic story. While the looming "global slowdown" tends to capture the zeitgeist when it comes to economists, markets and policy makers, the Canadian economy doesn't neatly fit within that trend.
In fact, a recent RBC research piece noted that Canada's employment report added an average of 40,000 jobs a month for the last six months, which would be the equivalent of an additional 400,000 jobs added to the U.S. non-farm payroll reports each month. In the U.S., the gain has actually averaged around 154,000 added jobs per month. Another interesting market indicator is the 2-year government bond yield, which of course tracks fairly closely to central bank rate expectations. In late April, Canada's 2-year yields were 80 basis points lower than the U.S. equivalent. Now, Canada's 2-year bond is around a dozen basis points higher than in the U.S.
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