HIGHLIGHTS OF THE WEEK – Feb 8

United States

• It was another tough week in financial markets. While the U.S. economy created 151k jobs in January and the unemployment rate fell to 4.9% (from 5.0%), the economic data did little to alleviate fears over the U.S. economy’s susceptibility to weak global growth and the strong dollar.

• Financial conditions have certainly tightened over the start of this year, as recognized by New York Federal Reserve President William Dudley in an interview this week.

• The higher dollar and increased risk aversion in financial markets will make it more difficult for the Fed to
achieve its inflation and growth projections and lower the probability of a March rate hike.

Canada

• Employment disappointed in January, with the unemployment rate rising to 7.2%. Alberta continues to bear
the brunt of the weakness, with the provincial unemployment rate exceeding the national average for the first time since 1988.

• Trade was a more positive story, with exports rebounding strongly in December on widespread gains.

• Looking beyond the near-term noise, we continue to expect a relatively robust economic performance in
2016. However, our forecast 1.3% real GDP growth for the year as a whole is largely due to a weak starting
point. We expect growth on a quarterly basis to average roughly 1.8%.