TD/ Canada Trust Economic Highlights – July 11


United States

• As financial markets continue to digest the outcome of Britain’s referendum decision to leave the EU,
attention this week turned to the American economy where data were generally upbeat.
• ISM indexes for both the manufacturing and non-manufacturing sectors showed activity picked up in June.
This news, however, paled in comparison to the blockbuster job report on Friday, which reported 287k
positions added to non-farm payrolls in the month.
• There are limits to how much backward looking data can change the post-Brexit lower-for-longer narrative.
Even while pushing a few basis points higher from the week’s lows, the U.S. 10-year yield continues to
hover around 1.4%, down nearly 35 basis points from the eve of the UK referendum.

• Two weeks after the Brexit vote, global bond yields continue to hit record lows. The Canadian 10-Year
yield fell below 1% for the first time ever. Oil prices also took a hit, but the loonie and the TSX actually
held up relatively well, given all this negativity.
• There were three data strikes against the Canadian economy this week: a somber business sentiment
reading, lackluster export momentum and a jobs report that could be generously described as treading
• Up to bat next week is Governor Poloz, who we expect to strike a cautious tone in the Bank of Canada’s
interest rate decision and updated economic forecast. This week’s data confirm that Canada’s adjustment
to low commodity prices is ongoing, and rates are likely to remain low until 2018 to facilitate the process.

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
[email protected]