balanced fund quarterly report

March 31, 2018

Economic Commentary

Financial markets remained quite volatile during the first quarter. The global economy is growing at its fastest pace since 2010. For the first time in many years there is coordinated growth around the world, with strengthening economies in North America, Europe, Asia and emerging markets. Overall, global growth is expected to be in the range of 3.8% in 2018. Increasing fears of a global trade war initiated by the United States, however, could cloud the overall economic outlook. The implementation of tariffs by President Trump will no doubt trigger retaliatory action by several countries, particularly from China. These actions could negatively impact the overall pace of global growth going forward. The Bank of Canada raised interest rates by 25 basis points at its meeting in January, however the pace of future rate hikes will be dependent on economic data. Although interest rates are increasing in both Canada and the U.S., the divergent path of rate hikes, with the U.S. being more aggressive, has had a negative impact on the Canadian dollar over the past few months.

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