HIGHLIGHTS OF THE WEEK – July 6

           United States

• Greece continued to make headlines all week. With a referendum on the creditors’ bailout plan set for Sunday, polls appear mixed and suggest that the ultimate outcome will be tight. Heightened uncertainty amidst capital controls could tip the scale in the direction of an acceptance vote.

• In the case of a yes vote, it will be difficult for Tsipras to stay on as Prime Minister, thus leading to politi­cal uncertainty. In the case of a no vote, the likelihood of a Grexit increases materially. Overall, markets continue to view contagion risks to the rest of the euro area as limited.

• On Thursday, a decent payrolls report on headline with +223k jobs created, underwhelmed in terms of details. Revisions subtracted 60k jobs from the previous two months, monthly wage growth was flat and decelerated from 2.3% to 2.0% Y/Y, while the participate rate fell 0.3pp. Markets were not impressed, pushing out Fed hike expectations back into 2016.

  Canada

• Risks of another Bank of Canada rate cut rose this week. Canadian real GDP fell 0.1% in April, a fourth consecutive monthly decline, raising the risk of a second consecutive quarterly contraction.

• TD Economics is still counting on a bounce back in economic activity over the second half of this year, but there are growing downside risks to that view.

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]