Softer Canadian Growth

Canadian third quarter GDP of 2% was softer than expected, which did not include the October and November decline in oil prices.  Economic growth for the fourth quarter will likely be lower than the Bank of Canada's current expectation.  TRI believes the Bank of Canada and the Federal Reserve might be on the verge of a policy error by continuing to raise short term interest rates as economic headwinds build and economic growth slows.  The market has now reduced expectations of a December rate hike in Canada and higher rates in January 2019 will be a ‘close call’. Market Trends Indications are the Oct 29 low marked the daily, weekly and annual cycle lows in the TSX & S&P500 Interest rates are in a topping process as higher yields appeared to be losing momentum to the upside USD has been strong this year, short-term we are seeing negative divergences which might be a pre-cursor to a potential correction Short-term the high levels of negative sentiment and deep oversold conditions make crude oil ripe for a decent size bounce TRI Cycle & Trend Signals The TRI Cycle and Trend Signals are shown below.  These signals are as of market close on…

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