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Economic & Financial Forecasts

F: Forecast by TD Economics as at September 2022; Forecasts for exchange rate and yields are end-of-period.
Source: Bloomberg, Bank of Canada, U.S. Federal Reserve.
  2022F 2023F 2024F
Real GDP (annual % change)      
Canada 3.3 0.9 1.0
U.S. 1.6 0.7 1.2
Canada (rates, %)      
Overnight Target Rate  4.00 3.25 1.75
2-yr Govt. Bond Yield  3.95 2.45 2.15
10-yr Govt. Bond Yield  3.35 2.95 2.60
U.S. (rates, %)      
Fed Funds Target Rate  4.25 3.50 2.00
2-yr Govt. Bond Yield  4.35 2.45 2.25
10-yr Govt. Bond Yield  3.90 2.95 2.70
 WTI ($US/bbl) 85 81 77
 Exchange Rate (USD per CAD) 0.72 0.72 0.75

 

Interest Rate Outlook

F: Forecast by TD Economics, October 2022; Forecasts are end-of-period.
Source: Bloomberg, Bank of Canada, Federal Reserve.
Interest Rates Spot Rate 2021 2022 2023
Oct-19 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4F Q1F Q2F Q3F Q4F
CANADA                          
Overnight Target Rate  3.25 0.25 0.25 0.25 0.25 0.50 1.50 3.25 4.25 4.25 4.25 4.25 3.25
3-mth T-Bill Rate  3.92 0.09 0.15 0.12 0.16 0.60 2.08 3.58 4.25 4.25 4.25 3.75 2.88
2-yr Govt. Bond Yield  4.19 0.22 0.45 0.53 0.95 2.27 3.10 3.79 4.20 3.60 3.10 2.70 2.35
5-yr Govt. Bond Yield  3.71 0.99 0.97 1.11 1.25 2.39 3.10 3.32 3.70 3.30 2.95 2.75 2.55
10-yr Govt. Bond Yield  3.55 1.55 1.39 1.51 1.42 2.40 3.23 3.16 3.50 3.40 3.25 3.10 2.95
30-yr Govt. Bond Yield  3.54 1.98 1.84 1.99 1.68 2.38 3.13 3.09 3.50 3.45 3.30 3.20 3.10
10-yr-2-yr Govt Spread -0.64 1.33 0.94 0.98 0.47 0.13 0.13 -0.63 -0.70 -0.20 0.15 0.40 0.60
U.S.                         
Fed Funds Target Rate  3.25 0.25 0.25 0.25 0.25 0.50 1.75 3.25 4.25 4.50 4.50 4.50 3.50
3-mth T-Bill Rate  3.90 0.03 0.05 0.04 0.06 0.51 1.66 3.22 4.30 4.40 4.40 3.90 3.00
2-yr Govt. Bond Yield  4.55 0.16 0.25 0.28 0.73 2.28 2.92 4.22 4.50 4.00 3.30 2.70 2.45
5-yr Govt. Bond Yield  4.35 0.92 0.87 0.98 1.26 2.42 3.01 4.06 4.30 3.80 3.25 3.05 2.85
10-yr Govt. Bond Yield  4.13 1.74 1.45 1.52 1.52 2.32 2.98 3.83 4.10 3.65 3.25 3.10 2.95
30-yr Govt. Bond Yield  4.12 2.41 2.06 2.08 1.90 2.44 3.14 3.79 4.10 3.70 3.50 3.40 3.25
10-yr-2-yr Govt Spread -0.42 1.58 1.20 1.24 0.79 0.04 0.06 -0.39 -0.40 -0.35 -0.05 0.40 0.50
CANADA - U.S SPREADS                          
Can - U.S. T-Bill Spread 0.02 0.06 0.10 0.08 0.10 0.09 0.42 0.36 -0.05 -0.15 -0.15 -0.15 -0.12
Can - U.S. 10-Year Bond Spread -0.58 -0.19 -0.06 -0.01 -0.10 0.08 0.25 -0.67 -0.60 -0.25 0.00 0.00 0.00

Foreign Exchange Outlook

F: Forecast by TD Economics, October 2022; Forecasts are end-of-period.
Source: Federal Reserve, Bloomberg.
Currency Exchange
rate		 Spot Price 2021 2022 2023
Oct-19 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4F Q1F Q2F Q3F Q4F
Exchange rate to U.S. dollar                          
 Chinese Yuan CNY per USD 7.23 6.55 6.46 6.44 6.36 6.34 6.70 7.11 7.20 7.15 7.10 7.05 7.00
 Japanese yen JPY per USD 150 111 111 112 115 121 136 145 149 150 151 148 145
 Euro USD per EUR 0.98 1.17 1.19 1.16 1.13 1.11 1.05 0.98 0.98 0.97 0.96 0.97 0.99
 U.K. pound USD per GBP 1.12 1.38 1.38 1.35 1.35 1.32 1.22 1.11 1.12 1.10 1.07 1.08 1.10
 Swiss franc CHF per USD 1.00 0.94 0.93 0.93 0.92 0.92 0.96 0.98 1.00 1.00 1.00 1.00 1.00
 Canadian dollar CAD per USD 1.38 1.26 1.24 1.27 1.28 1.25 1.29 1.38 1.38 1.39 1.40 1.39 1.37
 Australian dollar USD per AUD 0.63 0.76 0.75 0.72 0.72 0.75 0.69 0.64 0.64 0.63 0.62 0.63 0.65
 NZ dollar USD per NZD 0.57 0.70 0.70 0.69 0.68 0.70 0.63 0.56 0.56 0.55 0.54 0.55 0.57
Exchange rate to Euro                          
 U.S. dollar USD per EUR 0.98 1.17 1.19 1.16 1.13 1.11 1.05 0.98 0.98 0.97 0.96 0.97 0.99
 Japanese yen JPY per EUR 146 130 132 129 130 135 142 142 146 146 145 144 143
 U.K. pound GBP per EUR 0.87 0.85 0.86 0.86 0.84 0.84 0.86 0.88 0.88 0.88 0.90 0.90 0.90
 Swiss franc CHF per EUR 0.98 1.11 1.10 1.08 1.04 1.02 1.00 0.96 0.98 0.97 0.96 0.97 0.99
 Canadian dollar CAD per EUR 1.35 1.48 1.47 1.47 1.44 1.39 1.35 1.35 1.35 1.35 1.34 1.34 1.36
 Australian dollar AUD per EUR 1.56 1.54 1.58 1.60 1.56 1.48 1.52 1.52 1.53 1.54 1.55 1.53 1.53
 NZ dollar NZD per EUR 1.72 1.68 1.70 1.68 1.66 1.60 1.68 1.73 1.75 1.76 1.77 1.75 1.75
Exchange rate to Japanese yen                          
 U.S. dollar JPY per USD 150 111 111 112 115 121 136 145 149 150 151 148 145
 Euro JPY per EUR 146 130 132 129 130 135 142 142 146 146 145 144 143
 U.K. pound JPY per GBP 168 153 153 150 155 160 165 161 167 165 162 160 160
 Swiss franc JPY per CHF 149.1 117.4 120.0 119.4 125.7 131.8 142.1 147.0 149.0 150.0 151.0 148.0 145.0
 Canadian dollar JPY per CAD 108.9 88.0 89.5 88.0 90.2 97.3 105.4 105.2 108.0 107.9 107.9 106.8 105.7
 Australian dollar JPY per AUD 94.0 84.2 83.2 80.6 83.3 91.1 93.7 93.2 95.4 94.5 93.6 93.6 93.6
 NZ dollar JPY per NZD 85.0 77.3 77.5 76.9 78.5 84.4 84.7 81.6 83.6 82.8 82.1 82.0 82.0
Exchange rate to Canadian dollar                          
 U.S. dollar USD per CAD 0.73 0.80 0.81 0.79 0.78 0.80 0.78 0.73 0.73 0.72 0.71 0.72 0.73
 Japanese yen JPY per CAD 108.9 88.0 89.5 88.0 90.2 97.3 105.4 105.2 108.0 107.9 107.9 106.8 105.7
 Euro CAD per EUR 1.35 1.48 1.47 1.47 1.44 1.39 1.35 1.35 1.35 1.35 1.34 1.34 1.36
 U.K. pound CAD per GBP 1.54 1.73 1.71 1.71 1.72 1.64 1.57 1.53 1.55 1.53 1.50 1.50 1.51
 Swiss franc CHF per CAD 0.73 0.75 0.75 0.74 0.72 0.74 0.74 0.72 0.72 0.72 0.71 0.72 0.73
 Australian dollar AUD per CAD 1.16 1.04 1.08 1.09 1.08 1.07 1.12 1.13 1.13 1.14 1.15 1.14 1.13
 NZ dollar NZD per CAD 1.28 1.14 1.15 1.14 1.15 1.15 1.24 1.29 1.29 1.30 1.31 1.30 1.29

Global Stock Markets

*Weighted equity index including both developed and emerging markets.
Source: Bloomberg, TD Economics.
Major Market Indexes Price 30-Day YTD 52-Week 52-Week
Oct-19 % Chg. % Chg.  High Low
S&P 500 3,695 -4.6 -22.5 4,797 3,577
S&P/TSX Composite 18,674 -3.7 -12.0 22,087 18,206
DAX 12,741 0.0 -19.8 16,272 11,976
FTSE 100 6,925 -4.3 -6.2 7,672 6,826
Nikkei 27,257 -1.1 -5.3 29,808 24,718
MSCI AC World Index* 570 -4.6 -24.5 759 550

 

Commodity Price Outlook

F: Forecast by TD Economics, October 2022; Forecast are period averages; E: Estimate.
Source: Bloomberg, USDA (Haver).
Commodity  Price 52-Week 52-Week 2021 2022 2023
Oct-19 High Low Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4F Q1F Q2F Q3F Q4F
Crude Oil (WTI, $US/bbl) 86 124 66 58 66 71 77 94 109 91 85 88 85 83 81
Natural Gas ($US/MMBtu) 5.92 9.82 3.34 3.56 2.94 4.36 4.77 4.66 7.48 8.30 8.50 7.50 6.00 5.00 5.50
Gold ($US/troy oz.) 1629 2051 1622 1796 1815 1790 1796 1876 1873 1735 1770 1800 1725 1734 1742
Silver (US$/troy oz.) 18.47 26.41 17.81 26.25 26.71 24.30 23.35 24.05 22.66 18.50 19.60 19.90 20.00 20.10 20.20
Copper (cents/lb) 339 513 325 385 439 425 440 453 433 340 360 360 355 357 359
Nickel (US$/lb) 9.92 21.81 8.67 7.97 7.86 8.67 8.99 12.73 13.20 10.00 9.50 9.30 9.30 9.35 9.39
Aluminum (Cents/lb) 99 175 96 95 109 120 125 148 131 110 113 115 117 118 118
Wheat ($US/bu) 11.21 15.64 10.07 7.41 8.53 10.27 11.44 11.55 13.69 8.00 8.50 8.80 8.30 8.34 8.38

 

Canadian Economic Outlook

[Period-Over-Period Annualized Per Cent Change Unless Otherwise Indicated]

F: Forecast by TD Economics as at September 2022. Home price measure shown is the CREA Composite Sale Price.
* Intellectual Property Products. ** CPIX: CPI excluding the 8 most volatile components.
*** BoC Inflation: simple average of CPI-trim, CPI-median, and CPI-common.
Source: Statistics Canada, Bank of Canada, Canada Mortgage and Housing Corporation, Haver Analytics, TD Economics.
Economic Indicators 2022 2023 2024 Annual Average 4th Qtr/4th Qtr
Q1 Q2 Q3F Q4F Q1F Q2F Q3F Q4F Q1F Q2F Q3F Q4F 22F 23F 24F 22F 23F 24F
 Real GDP 3.1 3.3 1.6 1.0 0.6 0.3 0.4 0.7 1.0 1.2 1.3 1.4 3.3 0.9 1.0 2.2 0.5 1.2
 Consumer Expenditure 2.6 9.7 3.9 1.8 1.1 0.4 0.6 0.8 1.0 1.0 1.1 1.2 5.7 1.9 0.9 4.5 0.7 1.1
Durable Goods             8.8 -12.0 4.0 -1.0 0.0 0.1 0.1 0.1 0.2 0.3 0.3 0.4 -0.4 -0.5 0.2 -0.3 0.1 0.3
 Business Investment 7.0 11.8 5.2 2.9 2.0 1.6 1.3 1.0 1.1 0.8 1.1 1.4 7.0 2.9 1.1 6.6 1.5 1.1
Non-Res. Structures 12.7 11.1 6.0 3.0 2.0 1.5 1.0 0.5 1.0 0.5 1.0 1.5 9.8 2.9 0.9 8.1 1.2 1.0
Equipment & IPP* 0.8 12.8 4.3 2.7 2.0 1.8 1.5 1.5 1.3 1.1 1.2 1.4 4.1 2.9 1.3 5.1 1.7 1.2
 Residential Investment 7.3 -27.6 -12.0 -8.0 -5.0 -4.0 -2.0 1.0 1.2 1.4 1.5 1.6 -9.1 -7.3 0.5 -10.9 -2.5 1.4
 Govt. Expenditure 2.8 -1.2 3.4 2.5 2.0 1.9 1.9 1.8 1.8 1.8 1.8 1.8 2.0 2.0 1.8 1.8 1.9 1.8
 Final Domestic Demand 3.5 2.9 2.8 1.4 1.0 0.6 0.9 1.1 1.2 1.2 1.3 1.4 3.4 1.3 1.2 2.6 0.9 1.3
 Exports                   -9.0 10.9 7.4 6.8 3.4 2.3 2.1 2.0 2.0 2.0 1.8 1.7 3.0 4.5 2.0 3.8 2.4 1.9
 Imports                   -1.4 30.5 -4.2 6.6 3.4 2.2 2.0 2.0 2.0 2.0 1.8 1.7 7.7 4.0 2.0 7.1 2.4 1.9
 Change in Non-farm                                    
 Inventories (2012 $Bn) 14.2 38.0 20.0 18.0 16.0 14.0 11.7 9.7 8.7 8.8 8.9 9.0 22.5 12.9 8.9 -- -- --
 Final Sales 1.4 -2.9 7.7 1.8 1.4 1.0 1.3 1.5 1.4 1.2 1.3 1.4 2.1 1.9 1.3 2.0 1.3 1.3
 International Current                                    
 Account Balance ($Bn)  10.6 10.8 64.4 61.7 60.2 59.2 58.3 59.2 60.2 61.2 62.1 63.0 36.9 59.2 61.6 -- -- --
% of GDP  0.4 0.4 2.3 2.1 2.1 2.0 2.0 2.0 2.0 2.0 2.0 2.1 1.3 2.0 2.0 -- -- --
 Pre-tax Corp. Profits 33.2 62.8 -21.3 -16.0 -10.3 -0.1 1.2 1.8 1.9 2.1 2.3 2.4 14.6 -5.6 1.8 9.4 -2.0 2.2
% of GDP  15.2 16.5 15.3 14.5 14.0 13.9 13.9 13.8 13.8 13.7 13.7 13.7 15.4 13.9 13.7 -- -- --
 GDP Deflator (y/y) 8.8 9.9 9.7 8.4 6.0 3.2 2.6 2.4 2.3 2.1 2.1 2.0 9.2 3.5 2.1 8.4 2.4 2.0
 Nominal GDP  15.8 17.9 6.1 4.1 3.3 2.8 2.6 3.1 3.1 3.3 3.4 3.4 12.8 4.4 3.1 10.8 2.9 3.3
 Labour Force 0.9 0.9 -0.7 1.5 1.2 1.1 1.0 0.7 0.8 0.8 0.9 0.9 1.3 0.9 0.9 0.6 1.0 0.9
 Employment  3.2 3.9 -1.4 0.2 0.2 0.1 0.2 0.4 0.4 0.4 0.9 1.1 3.5 0.2 0.4 1.5 0.2 0.7
 Change in Empl. ('000s)  153 188 -70 11 9 4 9 17 18 21 44 55 661 40 88 281 39 137
 Unemployment Rate (%)  5.8 5.1 5.3 5.6 5.8 6.0 6.2 6.3 6.4 6.5 6.5 6.5 5.4 6.1 6.5 -- -- --
 Personal Disp. Income  21.6 3.9 3.2 2.4 1.9 1.6 1.4 1.8 2.3 3.3 3.4 3.4 5.8 2.2 2.5 7.5 1.7 3.1
 Pers. Savings Rate (%)  9.5 6.2 4.8 4.1 3.6 3.3 2.9 2.6 2.4 2.5 2.6 2.6 6.2 3.1 2.5 -- -- --
 Cons. Price Index (y/y) 5.8 7.4 7.4 7.0 5.9 3.8 3.1 2.6 2.3 2.1 2.1 2.0 6.9 3.8 2.1 7.0 2.6 2.0
 CPIX (y/y)** 4.8 5.9 6.0 6.1 5.4 3.9 3.2 2.6 2.4 2.2 2.1 2.0 5.7 3.7 2.2 6.1 2.6 2.0
 BoC Inflation ( y/y)*** 2.6 4.0 5.3 5.4 4.8 3.4 3.0 2.4 2.2 2.1 2.0 2.0 4.3 3.4 2.1 5.4 2.4 2.0
 Housing Starts ('000s) 244 271 257 233 216 208 202 197 198 199 204 208 251 206 202 -- -- --
 Home Prices (y/y) 16.9 3.4 -4.5 -13.6 -22.0 -14.1 -6.4 0.7 5.7 6.3 6.5 6.1 0.2 -11.2 6.1 -13.6 0.7 6.1
 Real GDP / worker (y/y) -1.7 -0.5 0.7 0.8 0.9 1.1 0.4 0.3 0.4 0.5 0.6 0.5 -0.2 0.7 0.5 0.8 0.3 0.5
 

U.S. Economic Outlook

[Period-Over-Period Annualized Per Cent Change Unless Otherwise Indicated]

F: Forecast by TD Economics as at September 2022.
* Intellectual Property Products. ** Non-farm business sector.
Source: Bureau of Labor Statistics, Bureau of Economic Analysis, Census Bureau, TD Economics.
Economic Indicators          2022 2023 2024 Annual Average 4th Qtr/4th Qtr
Q1 Q2 Q3F Q4F Q1F Q2F Q3F Q4F Q1F Q2F Q3F Q4F 22F 23F 24F 22F 23F 24F
 Real GDP -1.6 -0.6 1.1 0.9 0.7 0.5 0.7 1.0 1.2 1.4 1.6 1.7 1.6 0.7 1.2 0.0 0.7 1.5
 Consumer Expenditure 1.8 1.5 1.4 1.3 1.0 0.8 0.5 0.8 1.0 1.2 1.3 1.5 2.4 1.0 1.0 1.5 0.8 1.3
Durable Goods             5.9 -0.1 4.4 0.7 -4.1 -3.7 -5.5 -2.5 -0.3 -0.6 -0.5 -0.4 -0.4 -1.9 -1.7 2.7 -4.0 -0.5
 Business Investment 10.0 0.0 3.2 1.9 0.7 -0.3 -0.4 0.2 0.8 0.9 1.6 1.9 4.3 0.8 0.6 3.7 0.0 1.3
Non-Res. Structures -0.9 -13.2 -10.3 -3.0 -6.0 -7.0 -5.0 -3.0 0.0 0.0 1.0 1.6 -6.5 -6.4 -1.4 -7.0 -5.3 0.6
Equipment & IPP* 12.4 3.3 6.6 3.1 2.3 1.3 0.7 0.9 0.9 1.1 1.7 2.0 6.9 2.5 1.1 6.3 1.3 1.4
 Residential Investment 0.5 -16.2 -31.4 -17.4 -6.0 -1.1 1.0 2.7 5.3 8.9 7.8 5.7 -9.7 -10.5 4.9 -16.9 -0.9 6.9
 Govt. Expenditure -2.9 -1.8 0.3 1.0 0.6 0.6 0.6 0.9 0.8 0.8 1.0 1.2 -1.5 0.5 0.8 -0.9 0.7 0.9
 Final Domestic Demand 2.0 -0.2 -0.2 0.5 0.6 0.5 0.4 0.8 1.1 1.4 1.5 1.7 1.4 0.4 1.1 0.5 0.6 1.4
 Exports                   -4.8 17.6 8.5 4.5 1.7 1.2 1.0 2.6 3.6 3.6 4.3 3.8 6.9 3.8 3.0 6.1 1.6 3.8
 Imports                   18.9 2.8 -5.1 1.4 1.3 0.2 0.9 2.5 2.6 3.2 3.6 3.2 8.7 0.4 2.5 4.2 1.2 3.2
 Change in Private                                    
 Inventories 188.5 99.6 79.7 84.3 88.0 82.7 94.5 102.1 102.1 102.0 102.0 102.0 113.0 91.8 102.0 -- -- --
 Final Sales -1.2 1.3 1.6 0.8 0.6 0.7 0.4 0.8 1.2 1.4 1.6 1.7 0.9 0.8 1.1 0.6 0.6 1.5
 International Current                                    
 Account Balance ($Bn) -1166 -1057 -904 -837 -820 -775 -737 -716 -695 -696 -706 -733 -991 -762 -708 -- -- --
% of GDP  -4.8 -4.2 -3.6 -3.3 -3.2 -3.0 -2.8 -2.7 -2.6 -2.6 -2.6 -2.7 -4.0 -2.9 -2.6 -- -- --
 Pre-tax Corporate Profits                                    
 including IVA&CCA -8.4 26.7 -0.2 7.7 -3.6 -1.3 1.6 2.7 2.3 3.0 2.6 1.7 7.6 2.0 2.2 5.7 -0.2 2.4
% of GDP  11.8 12.2 12.1 12.1 11.9 11.7 11.7 11.7 11.6 11.6 11.6 11.6 12.0 11.7 11.6 -- -- --
 GDP Deflator (y/y) 6.8 7.5 7.5 7.2 5.9 4.4 3.5 2.7 2.4 2.2 2.0 1.9 7.3 4.1 2.1 7.2 2.7 1.9
 Nominal GDP  6.6 8.4 6.6 6.7 4.1 3.2 3.1 3.3 3.2 3.4 3.4 3.4 9.0 4.8 3.3 7.0 3.4 3.4
 Labor Force 5.1 0.3 1.1 1.2 1.5 0.7 0.6 0.5 0.5 0.5 0.5 0.5 2.0 1.0 0.6 1.9 0.9 0.5
 Employment  4.7 3.3 3.0 1.3 0.8 -0.2 -0.6 -0.6 -0.3 -0.4 -0.2 -0.1 4.0 0.9 -0.4 3.1 -0.1 -0.2
 Change in Empl. ('000s)  1721 1226 1140 507 288 -91 -214 -212 -111 -141 -73 -28 5867 1317 -549 4594 -229 -353
 Unemployment Rate (%)  3.8 3.6 3.6 3.7 3.8 4.0 4.3 4.5 4.6 4.8 4.9 5.1 3.7 4.2 4.9 -- -- --
 Personal Disp. Income  -1.3 6.5 4.6 6.2 4.9 3.5 4.4 3.7 4.4 3.6 3.7 3.8 0.4 4.8 3.9 4.0 4.1 3.9
 Pers. Savings Rate (%)  5.6 5.1 4.8 5.0 5.1 5.2 5.7 5.8 6.1 6.2 6.3 6.4 5.1 5.5 6.3 -- -- --
 Cons. Price Index (y/y) 8.0 8.6 8.4 7.4 5.8 3.8 2.9 2.5 2.2 2.2 2.1 2.0 8.1 3.7 2.1 7.4 2.5 2.0
 Core CPI (y/y) 6.3 6.0 6.2 6.0 5.2 4.3 3.5 3.1 2.8 2.7 2.6 2.5 6.1 4.0 2.6 6.0 3.1 2.5
 Core PCE Price Index (y/y) 5.2 4.8 4.7 4.5 3.9 3.5 3.0 2.7 2.5 2.4 2.3 2.2 4.8 3.3 2.4 4.5 2.7 2.2
 Housing Starts (mns)  1.72 1.66 1.47 1.42 1.37 1.33 1.32 1.34 1.40 1.43 1.46 1.47 1.57 1.34 1.44 -- -- --
 Real Output per hour** (y/y) -0.6 -2.4 -1.7 -3.4 -1.5 -0.2 0.5 1.1 1.5 1.8 1.9 2.0 -2.0 0.0 1.8 -3.4