TD/ Canada Trust Economic Highlights – July 18


United States
• Indicators this week continued to suggest a strong expansion in economic activity in the U.S. last quarter.
The strength in retail sales through June supports growth of 2.5% for the second quarter, and, together
with strong job and wage gains, suggests a strong hand-off to third quarter growth.
• Global uncertainty diminished slightly this week as the BoE confirmed forthcoming monetary easing next
month and Theresa May was selected as UK Prime Minister. Moreover, Chinese GDP growth for the second
quarter held at 6.7% y/y, with a strong rebound in services sector growth supporting overall activity.
• Given the downside risks to global growth from the UK referendum, we believe the Fed will remain all the
more patient, however a rate hike is still possible later this year if conditions warrant.

• The week started out on a strong note with housing starts picking-up in June to reach 218k units annualized,
from 187k the month prior.
• The good news did not last, as manufacturing sales pulled back markedly in May. The impact of the
Alberta wildfires was evident in petroleum & coal product sales that dropped 2.2% month-on-month and
even more so in volume terms with prices up 6.4%.
• The wildfires also showed up in downward revisions to the Bank of Canada’s outlook. The Bank maintained
its policy rate at 0.50%, pointing to expectations that the recent string of weak export data will give way
to healthier growth in the coming months and quarters.

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