Monthly Market Insights: October 2016

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Every month, Cambrian shares the Monthly Economic Commentary provided by our partners at Credential Financial Inc.. If you're looking for advice or have questions about the Monthly Economic Commentary, advisors are here to answer your questions.

Key takeaways from October

The Canadian dollar continues to take it on the chin, besieged by a multitude of factors, hitting lows not seen since the first quarter of this year. At home, talk of possible rate cuts in the Bank of Canada’s latest monetary policy report sent our currency reeling, along with the revised (lower) estimate of Canada’s GDP growth for this year and the next. As a commodity and resource-driven currency, the external fluctuation in the prices of oil and gold has had a correlated effect on the Dollar. As well, the U.S. election has a direct and inverse correlation on the Loonie as the U.S. green back moves up and down on either a Democratic or Republican victory. With a strengthening manufacturing sector, our Dollar should be able to control domestic variables, but it will still remain highly susceptible to exogenous factors.

Lacklustre economic data at home and globally have stalled growth in the manufacturing sector for the last couple of years. As well, extraordinary events such as Alberta’s wildfires and the U.K.’s Brexit referendum have put a damper on any positive momentum, at least for the short term. Despite this, the latest Canadian manufacturing numbers provided some hope that the industry is mending and on the road to recovery, as sector sales rose more optimistically than expected, increased expansion in industrial production, and the sector’s labour market saw more hirings. These data points may not be the sole factors that drive growth but it’s a step in the right direction - albeit small steps.

Read the full October Monthly Market Insights.