TD/ Canada Trust Economic Highlights – May 9

HIGHLIGHTS OF THE WEEK – May 9, 2016

United States

• Investor caution amid an uninspiring week of earnings and ahead of Friday’s jobs report caused markets to trade with a slightly less risk-on bias this week. Markets will close the week down and U.S. treasury yields will end the week almost 10 bps lower across the curve.

• Job growth slowed in April to a more modest 160k pace, but the headline number was not entirely unexpected as an unseasonably warm winter likely pulled some hiring activity into earlier months.

• April’s employment report is unlikely to push the Fed into action at its meeting next month. Still, with wages showing signs of life, it will not be long before the Fed resumes its tightening cycle, with a late-summer hike not out of the question in our view.

Canada

• This week our attention was focused on the wildfires burning through Fort McMurray in Alberta and the 90,000 people that have been evacuated from their homes.

• The economic toll from the wildfires, in combination with weak trade and employment reports, have led us to lower our expectations for real GDP growth in Q2. Real GDP will be hard pressed to grow in the quarter.

• However, a bounce-back in oil production and reconstruction efforts once the wildfires subside could lift economic growth to 3% in the second half of the year.

For further information, please contact:

John Maveety Manager, Residential Mortgages – Greater Ottawa Area TD Canada Trust
T: (613) 371-1984 F: (888) 899-1984 P: (866) 767-5446
John.Maveety@td.com