Canadian Treasurer

December 10, 2013

Global financial markets remain uneven, yet 2014 outlook Is upbeat for Canadian exporters, Scotiabank says

TORONTO--The 2014 Scotiabank Economic and Market Outlook Conference (EMOC) offered a measure of optimism to investors.

"Global economic activity remains highly uneven, with U.S. consumers getting back in a spending mood and Europe showing signs of crawling out of a lengthy recession just as China and some other new world powerhouses are losing momentum," said Warren Jestin, Senior Vice President and Chief Economist, Scotiabank. "From a Canadian perspective, the cyclical recovery of U.S. consumer spending and the prospect of a comprehensive trade deal with Europe are positive for exporters.

"On a longer-term basis, the real game changer in terms of opportunity is the rapid emergence of domestic demand in Asia and Latin America," added Dr. Jestin. "These nations are making the transition from world-class producers to consumers at an astonishing rate and will account for an increasing share of global economic activity over the balance of the decade."

Dr. Jestin was joined at EMOC by some of Canada's leading authorities, as Scotiabank's Camilla Sutton, Chief Currency Strategist, and Vincent Delisle, Managing Director, Portfolio Strategy Group, also shared their insights and forecasts. Myles Zyblock, Chief Investment Strategist, 1832 Asset Management L.P., served as moderator.

"The core foreign exchange theme over the next six months is likely to be a broadly stronger U.S. dollar (USD)," said Ms. Sutton. "The Canadian dollar (CAD) is expected to depreciate as the Bank of Canada strikes a dovish tone and pushes out expectations for higher interest rates just as the Federal Reserve begins to taper its bond buying program."

Mr. Delisle added: "Accelerating world GDP growth and Fed tapering should drive portfolio returns in 2014. We expect: improving economic news flow to bolster sentiment and equity flows; the upward normalization in bond yields to continue; monetary divergence to drive country-asset leadership; and sector correlations to mean-revert lower."

Scotiabank is a leading financial services provider in over 55 countries and Canada's most international bank. Through our team of more than 83,000 employees, Scotiabank and its affiliates offer a broad range of products and services, including personal and commercial banking, wealth management, corporate and investment banking to over 21 million customers.



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