TD/Canada Trust Economic Highlights – May 26


           United States

  • A year since Ben Bernanke first signalled the eventual end of Quantitative Easing, bond markets have been on a wild ride. After rising by close to 100 basis points over the course of 2013, the 10-year Treasury yield has pulled back around 50 basis points through 2014.

  • The retrenchment in yields reflects disappointment in the pace of economic growth both at home and abroad. While the Fed is likely to continue tapering asset purchases, the ECB is likely to further prime the pumps.

  • The good news is that lower bond yields have also lowered mortgage rates and should support a much-needed rebound in the housing market. Housing data has already shown signs of turning a corner with both new and existing home sales rising in April.


  • Canadian retail sales edged down 0.1% (M/M) in March, the first monthly setback in 2014 and below market consensus which had called for a 0.3% increase. The March decline was concentrated in the mo­tor vehicle and parts and clothing subsectors. In real terms, sales were down 0.2%.

  • Canadian wholesale sales fell 0.4% (M/M) in March, coming in below market consensus which called for a moderate increase. In volume terms, sales were down 0.2%.

  • The consumer price index (CPI) rose to 2.0% (Y/Y) in April, from 1.5% in March. April’s headline reading is the fastest pace of growth in the all-items CPI measure since early 2012. The core measure of inflation inched up 0.1 points higher in April at 1.4% (Y/Y), still below the Bank of Canada’s 2% target.

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