Less Fears from Emerging Countries FORECASTER - CANADA #1 … · 2018. 9. 14. · Consumer price index (August) – According to prices at the pump, gas went down 1.5% in August;

WEEKLY NEWSLETTER

François Dupuis, Vice-President and Chief Economist • Carine Bergevin-Chammah, Economist Mathieu D’Anjou, Senior Economist • Benoit P. Durocher, Senior Economist • Francis Généreux, Senior Economist • Hendrix Vachon, Senior Economist

Desjardins, Economic Studies: 514-281-2336 or 1 866-866-7000, ext. 5552336 • [email protected] • desjardins.com/economics

NOTE TO READERS: The letters k, M and B are used in texts and tables to refer to thousands, millions and billions respectively.IMPORTANT: This document is based on public information and may under no circumstances be used or construed as a commitment by Desjardins Group. While the information provided has been determined on the basis of data obtained from sources that are deemed to be reliable, Desjardins Group in no way warrants that the information is accurate or complete. The document is provided solely for information purposes and does not constitute an offer or solicitation for purchase or sale. Desjardins Group takes no responsibility for the consequences of any decision whatsoever made on the basis of the data contained herein and does not hereby undertake to provide any advice, notably in the area of investment services. The data on prices or margins are provided for information purposes and may be modified at any time, based on such factors as market conditions. The past performances and projections expressed herein are no guarantee of future performance. The opinions and forecasts contained herein are, unless otherwise indicated, those of the document’s authors and do not represent the opinions of any other person or the official position of Desjardins Group. Copyright © 2018, Desjardins Group. All rights reserved.

HIGHLIGHTS

f United States: Retail sales disappointed in August, but revisions saved the day.

f Renewed U.S. household confidence based on the University of Michigan index.

f Canada: Household debt rises once again.

f Canada: The number of housing starts remains high.

A LOOK AHEAD

f United States: Will the housing market start improving again?

f Canada: July should see higher manufacturing and retail sales.

f Canada: The total annual inflation rate could stay close to the upper target (3%).

FINANCIAL MARKETS

f The markets are up again in the United States and Europe, but not in Canada.

f The U.S. 10-year yield is again hovering around the 3.00% mark.

f The Canadian dollar climbed to nearly US$0.77.

Less Fears from Emerging Countries

ECONOMIC STUDIES | SEPTEMBER 14, 2018

CONTENTSKey Statistics of the Week ................................. 2

United States, Canada

Financial Markets ............................................... 3

A Look Ahead ................................................... 4United States, Canada, Overseas

Economic Indicators of the Week ...................... 6

TablesEconomic indicators ......................................... 8Major financial indicators ...............................10

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ECONOMIC STUDIES

2SEPTEMBER 14, 2018 | WEEKLY NEWSLETTER

UNITED STATES

f Retail sales rose just 0.1% in August after gaining 0.7% in July (revised from 0.5%). Motor vehicle sales declined 0.8%. Buoyed by higher gas prices, the value of gas station sales jumped 1.7%. Excluding motor vehicles and gas, sales inched up 0.2%, the weakest growth since January.

f Industrial output was up 0.4% in August after identical growth in July (revised from 0.1%). Manufacturing production gained 0.2%. Mining activity saw a 0.7% increase, while energy production jumped 1.2%. In manufacturing, the 4.0% jump in the auto sector may be surprising, as hours worked were fairly low in August. Without this increase, manufacturing would have stagnated in August with notably a decrease in non-durable goods.

f Consumer confidence improved in September according to the preliminary version of the University of Michigan index, which moved from 96.2 to 100.8, the highest it has been since March. The increase stems more from current conditions than consumer expectations.

f The total consumer price index (CPI) climbed 0.2% in August, the same as in July. Energy prices made positive contributions to the change in the CPI, especially the 3% increase in gas prices. The core CPI, which excludes food and energy, grew more slowly than expected, increasing only 0.1%, after three consecutive 0.2% gains. Note that there was a drop in the price of clothing and medical goods and services. Year over year, the total CPI slowed from 2.9% to 2.7%. Core inflation, which excludes food and energy, inched down from 2.4% to 2.2%.

Francis Généreux, Senior economist

CANADA

f Despite a slowdown in the housing market and an uptrend in interest rates, household indebtedness once again increased in the spring, from 168.30% to 169.10% (based on the ratio of credit market debt to disposable income). This is due to a quarterly increase of the debt on the credit market that was greater than that for disposable income (+1.4% vs. +0.9%).

f The number of housing starts remained quite high in August, at 200,986 units, which is nonetheless a little lower than the trend in recent months. Is this the beginning of slower growth due to rising interest rates? It is still too early to tell, especially since demand continues to be lively in many regions.

f As expected, the industrial capacity utilization rate continued its upward movement in the second quarter. At 85.5%, its highest level since Q2 2007, it reflects the full use of industrial capacity in Canada. With a utilization rate of 93.0%, the construction sector is especially busy.

Benoit P. Durocher, Senior economist

CANADAExcess production capacity is a thing of the past

Sources: Statistics Canada and Desjardins, Economic Studies

Industrial capacity utilization rate

In %

7072747678808284868890

1985 1988 1991 1994 1997 2000 2003 2006 2009 2012 2015 2018

Key Statistics of the Week


ECONOMIC STUDIES

15,900

16,000

16,100

16,200

16,300

16,400

16,500

2,800

2,825

2,850

2,875

2,900

2,925

2018/08/02 2018/08/10 2018/08/20 2018/08/28 2018/09/05 2018/09/13

S&P 500 (left) S&P/TSX (right)

GRAPH 1Stock markets

Sources: Datastream and Desjardins, Economic Studies

Index Index

2,22,32,42,52,62,72,82,93,03,1

-0,70

-0,65

-0,60

-0,55

-0,50

2018/08/02 2018/08/10 2018/08/20 2018/08/28 2018/09/05 2018/09/13

Spread (left) United States (right) Canada (right)

GRAPH 2Bond markets

10-year yield

In % points In %


GRAPH 3Currency markets

US$/C$ US$/€


1,13

1,14

1,15

1,16

1,17

1,18

0,755

0,760

0,765

0,770

0,775

0,780

02/08/2018 10/08/2018 20/08/2018 28/08/2018 05/09/2018 13/09/2018

Canadian dollar (left) Euro (right)

Financial MarketsOptimism Returns to the Markets

Two major risks for the global economy shrank this week. The first is the risk of escalating protectionist measures between the United States and China, which dropped when hope of a new round of negotiations between those countries was revived mid-week. Second, the risks of financial instability from emerging countries was mitigated after the Central Bank of Turkey ordered a stronger interest rate hike than expected to halt the freefall of the Turkish lira. The key rate was raised 625 basis points and is now at 24%. Russia also announced increased interest rates on Friday. Bottom line: once those risks were lowered, several markets around the world were back on the growth track. The S&P 500 index posted a weekly gain of about 1.0% at time of writing. The Canadian stock market did less well, ending with a slight loss for the week. Negotiations on the North American Free Trade Agreement (NAFTA) seemed to be going well at the beginning of the week, but now doubts have returned and investors are remaining cautious.

The lowering of the global risks has sustained the upward trend in bond yields in several countries. The U.S. 10-year yield is again hovering around the 3.00% mark, but lower than expected inflation figures in the United States slowed its rise on Thursday. Canadian bond yields also increased this week. The rise was more modest for short-term maturities, however, compared to the U.S. yields.

Since the demand for safe havens was down this week, the U.S. dollar lost value against most other currencies. The euro climbed to nearly US$1.17. There were no great revelations Thursday after the European Central Bank’s (ECB) monetary policy meeting. The ECB is holding the line on reducing its securities purchases, and is still confident about the progress of inflation. The U.K. pound was worth close to US$1.31, even though the Bank of England remained cautious. The Canadian dollar followed the overall trend and was briefly back up to US$0.77. However, uncertainty over NAFTA seems to have curbed its growth during the second half of the week.

Hendrix Vachon, Senior Economist

ECONOMIC STUDIES


A Look Ahead

UNITED STATES

Housing starts (August) – After plummeting 12.9% in June, housing starts stabilized with a slight 0.9% gain in July. We expect stronger growth in August. Building permits have outstripped housing starts for several months now—they should catch up sooner or later. The number of new constructions should be closer to the 1,303,000 building permits awarded in July. The 23,000 new jobs in the construction industry are another plus, but sales remain low. Overall, housing starts should go as high as 1,300,000 units, but may not reach that level due to recent disappointments.

Leading indicator (August) – The leading indicator rose 0.6% in July, a touch over the 0.5% gain recorded in June. We expect a similar increase for August. The ISM index, interest rates and consumer confidence were the primary contributors. However, these advances will be partly offset by the drop in hours worked and an anticipated decline in building permits. A 0.6% gain is expected.

Existing home sales (August) – Home sales have dipped since the winter, with the last monthly increase recorded in March. This weak performance is in contrast to the rest of the economy, especially the strength of the labour market. We expect a gain in August, mainly based on the higher level of pending home sales. Mortgage applications in view of a purchase were down again in August, however.

CANADA

Manufacturing sales (July) – The value of automobile product and energy product exports was up significantly in July; this should have a good positive effect on manufacturing sales. Factoring in the upward trend for most of the other components, total manufacturing sales could tick up 0.7% in July.

Consumer price index (August) – According to prices at the pump, gas went down 1.5% in August; this could lead to a drop of 0.05% in the total consumer price index (CPI) monthly change. Seasonal fluctuations are usually somewhat negative at this time of year (-0.1%). Factoring in the uptrend in the other components, August could end with a monthly increase of about 0.1% in total CPI. The annual inflation rate should therefore remain at the top of the Bank of Canada target range (3%).

Retail sales (July) – According to preliminary data, new car sales were still in difficulty in July. However, this negative contribution could be offset by an increase in service station sales due to gas price increases during the month. Factoring in the uptrend in the other components, bolstered by low unemployment rate, higher wages and greater consumer confidence, total retail sales could rise slightly for the month.

TUESDAY Sept. 18 - 8:30July m/m Consensus 0.7% Desjardins 0.7%June 1.1%

FRIDAY Sept. 21st - 8:30August m/m Consensus -0.2% Desjardins 0.1%July 0.5%

FRIDAY Sept. 21st - 8:30July m/m Consensus 0.5% Desjardins 0.4%June -0.2%

WEDNESDAY Sept. 19 - 8:30August ann. rate Consensus 1,231,000 Desjardins 1,300,000July 1,168,000

THURSDAY Sept. 20 - 10:00August m/m Consensus 0.5% Desjardins 0.6%July 0.6%

THURSDAY Sept. 20 - 10:00August ann. rate Consensus 5,380,000 Desjardins 5,380,000July 5,340,000


ECONOMIC STUDIES

OVERSEAS

Euro zone: PMI index (September – preliminary) – Most of Euroland’s confidence indexes have been trending downwards for some time. That is reflected in the composite PMI index, which has been declining slightly since its cyclical peak of 58.8 in January. The PMI indexes are still above 50, the cut-off point between expanding and contracting activity. However, recent levels suggest that the slower economic growth recorded since the beginning of the year could continue into Q3. September’s preliminary version of the consumer confidence index will be released on Thursday. That index has also been on a downturn since January, falling to its lowest level since spring 2017 in August.

FRIDAY Sept. 21 - 4:00September Consensus 54.5August 54.5

ECONOMIC STUDIES


Economic IndicatorsWeek of September 17 to 21st, 2018

Note: Desjardins, Economic Studies are involved every week in the Bloomberg survey for Canada and the United States. Approximately 15 economists are consulted for the Canadian survey and a hundred or so for the United States. Theabbreviations m/m, q/q and y/y correspond to monthly, quarterly and yearly variation respectively. Following the quarter, the abbreviations f, s and t correspond to first estimate, second estimate and third estimate respectively. The times shown are Daylight Saving Time (GMT - 4 hours). Forecast of Desjardins, Economic Studies of the Desjardins Group.

CANADA

Previous data Day Hour Indicator Period Consensus

UNITED STATESMONDAY 17 8:30 Empire manufacturing index Sept. 23.0 19.0 25.6

TUESDAY 18 10:00 NAHB housing market index Sept. 66 n/a 67 16:00 Net foreign security purchases (US$B) July n/a n/a -36.5

WEDNESDAY 19 8:30 Current account (US$B) Q2 -104.0 -115.0 -124.1 8:30 Housing starts (ann. rate) Aug. 1,231,000 1,300,000 1,168,000 8:30 Building permits (ann. rate) Aug. 1,305,000 1,290,000 1,303,000

THURSDAY 20 8:30 Initial unemployment claims Sept. 10-14 210,000 210,000 204,000 8:30 Philadelphia Fed index Sept. 15.8 19.0 11.9 10:00 Leading indicator (m/m) Aug. 0.5% 0.6% 0.6% 10:00 Existing home sales (ann. rate) Aug. 5,380,000 5,380,000 5,340,000

FRIDAY 21 --- ---

MONDAY 17 8:30 International transactions in securities ($B) July n/a 12.00 11.55 9:00 Existing home sales Aug.

TUESDAY 18 8:30 Manufacturing sales (m/m) July 0.7% 0.7% 1.1%

WEDNESDAY 19 --- ---

THURSDAY 20 --- ---

FRIDAY 21 8:30 Consumer price index Total (m/m) Aug. -0.2% 0.1% 0.5% Excluding food and energy (m/m) Aug. n/a 0.1% 0.5% Total (y/y) Aug. 2.7% 3.0% 3.0% Excluding food and energy (y/y) Aug. n/a 2.4% 2.3% 8:30 Retail sales Total (m/m) July 0.5% 0.4% -0.2% Excluding automobiles (m/m) July 0.6% 0.9% -0.1%


ECONOMIC STUDIES

Economic IndicatorsWeek of September 17 to 21st, 2018

Note: In contrast to the situation in Canada and the United States, disclosure of overseas economic fi gures is much more approximate. The day of publication is therefore shown for information purposes only. The abbreviations m/m, q/q and y/y correspond to monthly, quarterly and yearly variation respectively. The times shown are Daylight Saving Time (GMT - 4 hours).

Previous data m/m (q/q) y/y Country Hour Indicator Period

OVERSEAS

Consensus m/m (q/q) y/y

MONDAY 17Italy 4:00 Trade balance (€M) July n/a 5,071 Euro zone 5:00 Consumer price index Aug. 0.2% 2.0% -0.3% 2.1%

TUESDAY 18Japan 19:50 Trade balance (¥B) Aug. -144.1 -45.6

WEDNESDAY 19Japan --- Bank of Japan meeting Sept. -0.10% -0.10% Brazil --- Bank of Brazil meeting Sept. 6.50% 6.50% Euro zone 4:00 Current account (€B) July n/a 23.5 Italy 4:00 Current account (€M) July n/a 5,135 United Kingdom 4:30 Consumer price index Aug. 0.5% 2.4% 0.0% 2.5%United Kingdom 4:30 Producer price index Aug. 0.2% 2.9% 0.0% 3.1%Euro zone 5:00 Construction July n/a n/a 0.2% 2.6%

THURSDAY 20Switzerland 3:30 Swiss National Bank meeting Sept. -0.75% -0.75% Norway 4:00 Bank of Norway meeting Sept. 0.75% 0.50% United Kingdom 4:30 Retail sales Aug. -0.2% 2.3% 0.7% 3.5%Euro zone 10:00 Consumer confidence – preliminary Sept. -2.0 -1.9 Japan 19:30 Consumer price index Aug. 1.1% 0.9%Japan 20:30 PMI manufacturing index – preliminary Sept. n/a 52.5

FRIDAY 21Japan 0:30 All industry activity index July 0.1% -0.8% France 2:45 Real GDP – final Q2 0.2% 1.7% 0.2% 1.7%France 2:45 Wages – final Q2 0.4% 0.4% France 3:15 PMI composite index – preliminary Sept. 54.6 54.9 France 3:15 PMI manufacturing index – preliminary Sept. 53.4 53.5 France 3:15 PMI services index – preliminary Sept. 55.2 55.4 Germany 3:30 PMI composite index – preliminary Sept. 55.4 55.6 Germany 3:30 PMI manufacturing index – preliminary Sept. 55.7 55.9 Germany 3:30 PMI services index – preliminary Sept. 55.0 55.0 Euro zone 4:00 PMI composite index – preliminary Sept. 54.5 54.5 Euro zone 4:00 PMI manufacturing index – preliminary Sept. 54.5 54.6 Euro zone 4:00 PMI services index – preliminary Sept. 54.4 54.4

ECONOMIC STUDIES


REF. MONTH LEVEL

-1 month -3 months -6 months -1 year

Leading indicator (2010 = 100) July 110.7 0.6 1.3 2.7 6.3

ISM manufacturing index1 Aug. 61.3 58.1 58.7 60.8 59.3

ISM non-manufacturing index1 Aug. 58.5 55.7 58.6 59.5 55.2

Cons. confidence Conference Board (1985 = 100)1 Aug. 133.4 127.9 128.8 130.0 120.4Personal consumption expenditure (2009 $B) July 12,907 0.2 0.8 1.5 2.8Disposable personal income (2009 $B) July 14,372 0.2 0.7 1.3 2.9Consumer credit ($B) July* 3,918 0.4 1.2 2.0 4.6Retail sales ($M) Aug.* 509,025 0.1 1.0 3.3 6.6

Excluding automobiles ($M) Aug.* 407,332 0.3 1.5 3.8 7.3Industrial production (2007 = 100) Aug.* 108.2 0.4 1.4 2.2 4.9

Production capacity utilization rate (%)1 Aug.* 78.1 77.9 77.4 77.2 75.7New machinery orders ($M) July 497,754 -0.8 0.3 3.6 9.0New durable good orders ($M) July 247,177 -1.7 -1.2 5.0 9.4Business inventories ($B) July* 1,950 0.6 1.1 1.8 4.3

Housing starts (k)1 July 1,168 1,158 1,276 1,334 1,185

Building permits (k)1 July 1,303 1,292 1,364 1,366 1,258

New home sales (k)1 July 627.0 638.0 633.0 633.0 556.0

Existing home sales (k)1 July 5,340 5,380 5,450 5,380 5,420

Commercial surplus ($M)1 July -50,082 -45,739 -45,512 -52,334 -44,221

Nonfarm employment (k)2 Aug. 149,279 201.0 556.0 1,154 2,330

Unemployment rate (%)1 Aug. 3.9 3.9 3.8 4.1 4.4Consumer price (1982–1984 = 100) Aug.* 251.8 0.2 0.5 0.9 2.7

Excluding food and energy Aug.* 258.1 0.1 0.5 0.9 2.2Personal cons. expenditure deflator (2009 = 100) July 108.3 0.1 0.4 0.8 2.3

Excluding food and energy July 110.1 0.2 0.5 1.0 2.0Producer price (2009 = 100) Aug.* 116.3 -0.1 0.2 1.0 2.8Export prices (2000 = 100) Aug.* 127.3 -0.1 -0.4 1.2 3.6Import prices (2000 = 100) Aug.* 127.4 -0.6 -0.6 0.5 3.7

1 Statistic shows the level of the month of the column; 2 Statistic shows the variation since the reference month; * New statistic in comparison with last week.

UNITED STATESMonthly economic indicators

VARIATION (%)

UNITED STATESQuarterly economic indicators

REF. QUART. LEVEL

Quart. ann. 1 year 2017 2016 2015

Gross domestic product (2009 $B) 2018 Q2 18,515 4.2 2.9 2.2 1.6 2.9Consumption (2009 $B) 2018 Q2 12,841 3.8 2.6 2.5 2.7 3.7Government spending (2009 $B) 2018 Q2 3,171 2.4 1.3 -0.1 1.4 1.9Residential investment (2009 $B) 2018 Q2 612.8 -1.6 1.2 3.3 6.5 10.1Non-residential investment (2009 $B) 2018 Q2 2,709 8.5 7.0 5.3 0.5 1.8

Business inventory change (2009 $B)1 2018 Q2 -26.9 --- --- 22.5 23.4 129.0Exports (2009 $B) 2018 Q2 2,573 9.1 5.7 3.0 -0.1 0.6Imports (2009 $B) 2018 Q2 3,417 -0.4 4.2 4.6 1.9 5.5Final domestic demand (2009 $B) 2018 Q2 19,327 3.9 2.9 2.5 2.3 3.3GDP deflator (2009 = 100) 2018 Q2 110.2 3.0 2.4 1.9 1.1 1.0Labor productivity (2009 = 100) 2018 Q2 105.1 2.9 1.3 1.1 0.1 1.3Unit labor cost (2009 = 100) 2018 Q2 109.3 -1.0 1.9 2.2 0.9 1.7Employment cost index (Dec. 2005 = 100) 2018 Q2 133.3 2.4 2.8 2.5 2.2 2.1

Current account balance ($B)1 2018 Q1 -124.1 --- --- -449.1 -432.9 -407.8

VARIATION (%) ANNUAL VARIATION (%)

1 Statistics representing the level during the period; * New statistic in comparison with last week.


ECONOMIC STUDIES

REF. MONTH LEVEL

-1 month -3 months -6 months -1 year

Gross domestic product (2007 $M) June 1,784,438 0.0 0.7 1.2 2.4Industrial production (2007 $M) June 386,343 -0.3 0.5 1.1 2.5Manufacturing sales ($M) June 58,071 1.1 1.6 3.8 6.9

Housing starts (k)1 Aug.* 201.0 205.8 194.7 231.3 225.5Building permits ($M) July 8,208 -0.1 3.9 -2.1 0.4Retail sales ($M) June 50,666 -0.2 0.9 2.3 3.8

Excluding automobiles ($M) June 37,043 -0.1 1.7 2.7 3.9Wholesale trade sales ($M) June 63,074 -0.8 0.1 1.6 3.9

Commercial surplus ($M)1 July -114.3 -743.0 -1,597 -1,930 -2,598Exports ($M) July 51,265 0.8 4.9 11.9 16.3Imports ($M) July 51,380 -0.4 1.8 7.6 10.1

Employment (k)2 Aug. 18,631 -51.6 11.4 9.7 14.3

Unemployment rate (%)1 Aug. 6.0 5.8 5.8 5.8 6.2Average weekly earnings ($) June 999.7 0.3 0.2 0.6 2.8

Number of salaried employees (k)2 June 16,632 32.1 29.2 32.0 28.1Consumer price (2002 = 100) July 134.3 0.5 0.8 2.0 3.0

Excluding food and energy July 128.5 0.5 0.8 1.8 2.3Excluding 8 volatile items July 131.8 0.2 0.2 1.2 1.6

Industrial product price (2002 = 100) July 119.4 -0.2 1.6 3.4 6.6Raw materials price (2002 = 100) July 116.4 0.7 5.1 7.9 22.0Money supply M1+ ($M) July 980,632 -0.2 0.2 1.6 4.0

1 Statistic shows the level of the month of the column; 2 Statistic shows the variation since the reference month; * New statistic in comparison with last week.

CANADAMonthly economic indicators

VARIATION (%)

REF. QUART. LEVEL

Quart. ann. 1 year 2017 2016 2015

Gross domestic product (2007 $M) 2018 Q2 1,891,153 2.9 1.9 3.0 1.4 1.0Household consumption (2007 $M) 2018 Q2 1,083,677 2.6 2.2 3.5 2.4 2.1Government consumption (2007 $M) 2018 Q2 366,209 1.6 2.9 2.3 2.2 1.6Residential investment (2007 $M) 2018 Q2 128,092 1.1 0.7 2.9 3.3 3.8Non-residential investment (2007 $M) 2018 Q2 182,622 1.9 6.7 2.8 -9.4 -11.3

Business inventory change (2007 $M)1 2018 Q2 14,112 --- --- 13,921 978.0 4,711Exports (2007 $M) 2018 Q2 607,635 12.3 1.9 1.1 1.0 3.5Imports (2007 $M) 2018 Q2 621,979 6.5 4.9 3.6 -1.0 0.7Final domestic demand (2007 $M) 2018 Q2 1,882,843 2.1 2.9 3.0 1.1 0.3GDP deflator (2007 = 100) 2018 Q2 117.6 2.1 2.1 2.3 0.6 -0.8Labour productivity (2007 = 100) 2018 Q2 110.0 2.7 0.0 1.9 0.6 -0.5Unit labour cost (2007 = 100) 2018 Q2 116.8 -1.6 3.0 0.2 -0.1 2.3

Current account balance ($M)1 2018 Q2 -15,876 --- --- -63,267 -65,372 -71,526

Production capacity utilization rate (%)1 2018 Q2* 85.5 --- --- 82.5 80.2 80.5Disposable personal income ($M) 2018 Q2 1,248,172 2.8 3.9 4.9 2.2 4.7Corporate net operating surplus (2007 $M) 2018 Q2 283,584 11.8 4.6 19.9 -1.9 -19.8

1 Statistics representing the level during the period; * New statistic in comparison with last week.

CANADAQuarterly economic indicators

VARIATION (%) ANNUAL VARIATION (%)

ECONOMIC STUDIES


ACTUAL

Sep. 14 Sep. 7 -1 month -3 months -6 months -1 year Higher Average Lower

United StatesFederal funds – target 2.00 2.00 2.00 2.00 1.50 1.25 2.00 1.63 1.25Treasury bill – 3 months 2.15 2.10 2.01 1.90 1.75 1.03 2.15 1.62 1.00Treasury bonds – 2 years 2.78 2.71 2.61 2.55 2.29 1.38 2.78 2.19 1.40Treasury bonds – 5 years 2.89 2.83 2.75 2.80 2.64 1.81 2.94 2.50 1.83Treasury bonds – 10 years 2.99 2.94 2.88 2.92 2.85 2.20 3.12 2.71 2.22Treasury bonds – 30 years 3.13 3.10 3.03 3.05 3.08 2.77 3.25 2.98 2.69S&P 500 index (level) 2,899 2,872 2,850 2,780 2,752 2,500 2,914 2,706 2,497DJIA index (level) 26,102 25,917 25,669 25,090 24,947 22,268 26,617 24,582 22,284Gold price (US$/ounce) 1,194 1,198 1,179 1,281 1,314 1,322 1,359 1,285 1,179CRB index (level) 190.60 190.36 188.74 196.24 194.46 184.05 206.38 193.43 180.90WTI oil (US$/barrel) 69.16 67.73 65.93 65.01 62.29 49.90 77.41 63.23 49.34

CanadaOvernight – target 1.50 1.50 1.50 1.25 1.25 1.00 1.50 1.21 1.00Treasury bill – 3 months 1.52 1.52 1.48 1.22 1.07 1.00 1.55 1.16 0.87Treasury bonds – 2 years 2.13 2.11 2.11 1.89 1.76 1.60 2.14 1.79 1.39Treasury bonds – 5 years 2.26 2.21 2.19 2.08 1.98 1.81 2.33 1.99 1.59Treasury bonds – 10 years 2.34 2.29 2.26 2.22 2.14 2.09 2.52 2.18 1.83Treasury bonds – 30 years 2.36 2.30 2.27 2.25 2.29 2.43 2.53 2.33 2.10

Spread with the U.S. rate (% points)Overnight – target -0.50 -0.50 -0.50 -0.75 -0.25 -0.25 -0.25 -0.41 -0.75Treasury bill – 3 months -0.63 -0.58 -0.53 -0.68 -0.68 -0.03 0.00 -0.45 -0.74Treasury bonds – 2 years -0.65 -0.60 -0.50 -0.66 -0.53 0.22 0.17 -0.40 -0.77Treasury bonds – 5 years -0.63 -0.62 -0.56 -0.72 -0.66 0.00 -0.04 -0.51 -0.79Treasury bonds – 10 years -0.65 -0.65 -0.62 -0.70 -0.71 -0.11 -0.12 -0.54 -0.78Treasury bonds – 30 years -0.77 -0.80 -0.76 -0.80 -0.79 -0.34 -0.32 -0.65 -0.85

S&P/TSX index (level) 15,996 16,090 16,324 16,314 15,711 15,173 16,567 15,949 15,035Exchange rate (C$/US$) 1.3038 1.3156 1.3060 1.3202 1.3097 1.2195 1.3339 1.2809 1.2268Exchange rate (C$/€) 1.5172 1.5199 1.4939 1.5326 1.6095 1.4564 1.6130 1.5251 1.4561

OverseasEuro zoneECB – Refinancing rate 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00Exchange rate (US$/€) 1.1635 1.1553 1.1439 1.1609 1.2289 1.1943 1.2510 1.1909 1.1344

United KingdomBoE – Base rate 0.75 0.75 0.75 0.50 0.50 0.25 0.75 0.50 0.25Bonds – 10 years 1.53 1.36 1.28 1.37 1.46 1.36 1.67 1.39 1.18FTSE index (level) 7,304 7,278 7,559 7,634 7,164 7,215 7,877 7,478 6,889Exchange rate (US$/£) 1.3072 1.2924 1.2753 1.3286 1.3941 1.3593 1.4338 1.3469 1.2698

GermanyBonds – 10 years 0.45 0.39 0.31 0.40 0.57 0.44 0.72 0.45 0.27DAX index (level) 12,124 11,960 12,211 13,011 12,390 12,519 13,560 12,714 11,787

JapanBoJ – Main policy rate -0.10 -0.10 -0.10 -0.10 -0.10 -0.10 -0.10 -0.10 -0.10Nikkei index (level) 23,095 22,307 22,270 22,852 21,677 19,910 24,124 22,247 19,910Exchange rate (US$/¥) 112.01 111.08 110.51 110.68 106.02 110.85 114.18 110.46 104.74

CRB: Commodity Research Bureau; WTI: West Texas Intermediate; ECB: European Central Bank; BoE: Bank of England; BoJ: Bank of JapanNote: Data taken at markets closing, with the exeption of the current day where they were taken at 11:00 a.m.

UNITED STATES, CANADA, OVERSEASMajor financial indicators

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