Solid domestic fundamentals help insulate Canada from global economic uncertainties: Scotiabank

Solid domestic fundamentals help insulate Canada from global economic 
uncertainties: Scotiabank 
TORONTO, Dec. 5, 2012 /CNW/ - Scotiabank's leading market commentators today 
outlined their outlook on global developments that will drive the economy and 
capital markets in 2013 and 2014. 
"While Canada may lag U.S. growth as job creation and household spending 
moderate, in many ways our economic fundamentals remain more favourable here," 
said Warren Jestin, Senior Vice President and Chief Economist, Scotiabank. 
"Unlike the U.S. and Europe, Canada has regained the jobs lost during the 
financial crisis and its real estate markets are in much better shape." 
Addressing Bank clients and the media at Scotiabank's 2013-2014 Economic and 
Market Outlook Conference, Mr. Jestin said global economic and political 
uncertainty now fueling financial market volatility is likely to linger well 
beyond 2012. He said the European fiscal crisis will remain in the headlines, 
with public sector retrenchment and private deleveraging keeping a number of 
debt-heavy nations in recession through much of 2013. 
"However Canada's relatively better fiscal position provides a strategic 
advantage important for longer-term growth and prosperity," added Mr. Jestin. 
"A world-class financial system also supports growth at a time when banking 
crises in many countries have impeded economic revitalization." 
The outlook for the Canadian dollar in 2013 and 2014 is also strong, said 
Camilla Sutton, Chief FX Strategist. She expects it to close both years above 
parity and with an appreciating trend. 
"The single most important factor driving our view is relative monetary 
policy," added Ms. Sutton. "Entering 2013, the U.S. Federal Reserve is 
expected to expand its quantitative easing program again. This balance sheet 
expansion juxtaposed against the Bank of Canada's neutral-to-hawkish stance is 
likely to prove a significant support for the Canadian dollar." 
Vincent Delisle, Investment Strategist, Portfolio Strategy Group, forecasts a 
modest upside to corporate profits and expects equity gains to be supported by 
price-to-earnings ratio (P/E) expansion, as risk-appetite slowly recovers.. 
"Our game plan for 2013 is to be positioned for pro-growth conditions - 
equities over bonds, cyclicals over defensives - in the first half," said 
Mr. Delisle. "The Toronto Stock Exchange (TSX) could modestly outperform the 
Standard and Poor (S&P) 500 initially in 2013, but diverging housing trends 
and tepid commodity gains are likely to keep the Standard and Poor 500 ahead 
of the MSCI World AC (All Country) index again in 2013." 
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. 
Scotiabank is one of North America's premier financial institutions and 
Canada's most international bank. With more than 81,000 employees, Scotiabank 
and its affiliates serve some 19 million customers in more than 55 countries 
around the world. Scotiabank offers a broad range of products and services 
including personal, commercial, corporate and investment banking. With assets 
of $670 billion (as at July 31, 2012), Scotiabank trades on the Toronto (BNS) 
and New York Exchanges (BNS). For more information please visit 
Devinder Lamsar, Scotiabank Media Communications, (416) 
SOURCE: Scotiabank - Economic Reports 
To view this news release in HTML formatting, please use the following URL: 
CO: Scotiabank
ST: Ontario
-0- Dec/05/2012 15:00 GMT
Press spacebar to pause and continue. Press esc to stop.