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Interest Rate Outlook

F: Forecast by TD Economics, March 2024. All forecasts are end-of-period.
Source: Bloomberg, Bank of Canada, Federal Reserve, TD Economics.
Interest Rates 2023 2024 2025
Q1 Q2 Q3 Q4 Q1F Q2F Q3F Q4F Q1F Q2F Q3F Q4F
Canada                        
Overnight Target Rate  4.50 4.75 5.00 5.00 5.00 5.00 4.50 4.00 3.50 3.00 2.50 2.25
3-mth T-Bill Rate  4.34 4.90 5.07 5.04 5.00 4.75 4.25 3.75 3.25 2.75 2.38 2.25
2-yr Govt. Bond Yield  3.74 4.58 4.87 3.88 4.15 3.85 3.55 3.25 2.95 2.65 2.35 2.35
5-yr Govt. Bond Yield  3.02 3.68 4.25 3.17 3.50 3.45 3.15 2.90 2.70 2.65 2.60 2.60
10-yr Govt. Bond Yield  2.90 3.26 4.03 3.10 3.40 3.35 3.20 3.05 2.90 2.85 2.85 2.85
30-yr Govt. Bond Yield  3.00 3.08 3.81 3.02 3.35 3.30 3.25 3.15 3.15 3.15 3.15 3.15
10-yr-2-yr Govt Spread -0.84 -1.32 -0.84 -0.78 -0.75 -0.50 -0.35 -0.20 -0.05 0.20 0.50 0.50
U.S.                         
Fed Funds Target Rate  5.00 5.25 5.50 5.50 5.50 5.50 5.25 4.75 4.25 3.75 3.25 2.75
3-mth T-Bill Rate  4.68 5.17 5.32 5.20 5.25 5.30 4.90 4.40 3.90 3.40 2.90 2.65
2-yr Govt. Bond Yield  4.06 4.87 5.03 4.23 4.60 4.40 4.10 3.80 3.50 3.20 2.90 2.75
5-yr Govt. Bond Yield  3.60 4.13 4.60 3.84 4.20 4.05 3.75 3.50 3.25 3.05 2.95 2.95
10-yr Govt. Bond Yield  3.48 3.81 4.59 3.88 4.20 4.10 3.85 3.65 3.45 3.30 3.20 3.20
30-yr Govt. Bond Yield  3.67 3.85 4.73 4.03 4.35 4.25 4.15 3.95 3.75 3.60 3.50 3.50
10-yr-2-yr Govt Spread -0.58 -1.06 -0.44 -0.35 -0.40 -0.30 -0.25 -0.15 -0.05 0.10 0.30 0.45
Canada - U.S. Spreads                        
Can - U.S. T-Bill Spread -0.34 -0.27 -0.25 -0.16 -0.25 -0.55 -0.65 -0.65 -0.65 -0.65 -0.52 -0.40
Can - U.S. 10-Year Bond Spread -0.58 -0.55 -0.56 -0.78 -0.80 -0.75 -0.65 -0.60 -0.6 -0.5 -0.4 -0.4

Foreign Exchange Outlook

F: Forecast by TD Economics, March 2024. All forecasts are end-of-period.
Source: Bloomberg, Bank of Canada, Federal Reserve, TD Economics.
Currency Exchange Rate 2023 2024 2025
Q1 Q2 Q3 Q4 Q1F Q2F Q3F Q4F Q1F Q2F Q3F Q4F
Exchange Rate to U.S. Dollar                        
 Euro USD per EUR 1.09 1.09 1.06 1.11 1.08 1.05 1.07 1.09 1.11 1.14 1.16 1.18
 UK Pound USD per GBP 1.24 1.27 1.22 1.27 1.26 1.23 1.25 1.27 1.30 1.30 1.30 1.30
 Japanese Yen JPY per USD 132.8 144.5 149.4 140.9 145.0 144.0 143.0 142.0 141.0 139.6 138.2 136.8
 Chinese Renminbi CNY per USD 6.87 7.25 7.30 7.10 7.17 7.20 7.15 7.10 7.05 7.00 6.95 6.90
Exchange Rate to Canadian Dollar                        
 U.S. Dollar USD per CAD 0.74 0.76 0.74 0.76 0.74 0.73 0.73 0.74 0.76 0.77 0.79 0.80
 Euro CAD per EUR 1.47 1.45 1.43 1.46 1.46 1.44 1.46 1.48 1.47 1.47 1.47 1.48
 UK Pound CAD per GBP 1.67 1.68 1.65 1.68 1.70 1.68 1.71 1.72 1.72 1.69 1.65 1.63
 Japanese Yen JPY per CAD 98.2 109.2 110.4 106.7 107.4 105.1 104.8 105.2 106.6 107.7 108.8 109.5
 Chinese Renminbi CNY per CAD 5.08 5.48 5.39 5.37 5.31 5.26 5.24 5.26 5.33 5.40 5.47 5.52

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
Jan-09 % Chg. % Chg.  High Low
S&P 500 4,744 3.0 -0.5 4,783 3,856
S&P/TSX Composite 20,916 2.9 -0.2 21,075 18,737
DAX 16,684 -0.4 -0.4 16,794 14,610
FTSE 100 7,686 1.7 -0.6 8,014 7,257
Nikkei 33,763 4.5 0.9 33,763 25,822
MSCI AC World Index* 722 3.4 -0.7 729 612

Commodity Price Outlook

F: Forecast by TD Economics, March 2024. All forecasts are period averages.
Source: Bloomberg, TD Economics, USDA (Haver).
Commodity 2023 2024 2025
Q1 Q2 Q3 Q4 Q1F Q2F Q3F Q4F Q1F Q2F Q3F Q4F
Crude Oil (WTI, $US/bbl) 76 74 82 78 76 82 82 80 79 78 78 77
Natural Gas ($US/MMBtu) 2.66 2.16 2.59 2.75 2.20 2.40 2.60 2.80 2.90 2.90 3.00 3.00
Gold ($US/troy oz.) 1889 1977 1928 1977 2050 2175 2075 2000 2000 2000 2000 2000
Silver ($US/troy oz.) 22.56 24.19 23.58 23.27 23.25 25.00 24.50 24.00 24.00 24.00 23.50 23.50
Copper (cents/lb) 405 384 379 371 380 395 400 400 395 395 390 390
Nickel ($US/lb) 11.81 10.13 9.23 7.81 7.60 7.80 8.00 8.20 8.30 8.30 8.30 8.30
Aluminum (cents/lb) 109 103 98 99 100 100 104 104 106 106 108 108
Wheat ($US/bu) 7.32 6.50 5.76 5.89 5.75 5.50 5.75 6.00 6.00 6.00 6.00 6.00

Canadian Economic Outlook

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

F: Forecast by TD Economics, March 2024. Note: 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 and CPI-median.
Source: Statistics Canada, Bank of Canada, Canada Mortgage and Housing Corporation, Haver Analytics, TD Economics.
Economic Indicators 2023 2024 2025 Annual Average 4th Qtr/4th Qtr
Q1 Q2 Q3 Q4 Q1F Q2F Q3F Q4F Q1F Q2F Q3F Q4F 23 24F 25F 23 24F 25F
 Real GDP 2.6 0.6 -0.5 1.0 1.3 1.0 1.2 1.3 1.6 1.7 1.8 2.0 1.1 0.9 1.5 0.9 1.2 1.8
 Consumer Expenditure 4.1 -0.7 0.5 1.0 3.0 1.5 0.9 0.9 1.1 1.3 1.4 1.6 1.7 1.4 1.2 1.2 1.6 1.3
Durable Goods             3.8 -3.0 4.2 7.0 7.0 2.0 1.5 1.0 1.0 1.2 1.4 1.5 2.3 4.0 1.2 2.9 2.8 1.3
 Business Investment 3.2 9.6 -13.9 -7.7 3.1 2.7 3.3 3.3 3.0 3.0 3.0 3.1 -0.6 -1.0 3.1 -2.6 3.1 3.0
Non-Res. Structures 3.4 10.6 -14.3 -11.6 4.0 3.0 3.5 3.5 3.0 3.3 3.3 3.2 2.6 -1.5 3.2 -3.5 3.5 3.2
Equipment & IPP* 3.0 8.7 -13.5 -3.6 2.2 2.4 3.1 3.2 3.0 2.8 2.8 2.9 -3.8 -0.4 2.9 -1.7 2.7 2.9
 Residential Investment -14.0 -3.5 8.7 -1.7 2.0 3.3 3.7 4.0 4.2 3.9 3.5 3.3 -10.2 2.3 3.8 -3.0 3.2 3.7
 Govt. Expenditure 3.5 -0.4 6.1 -1.1 2.5 2.7 2.3 2.2 2.1 2.1 2.0 2.0 2.1 2.0 2.2 2.0 2.4 2.0
 Final Domestic Demand 2.2 0.4 0.8 -0.7 2.8 2.0 1.7 1.7 1.8 1.8 1.9 1.9 0.5 1.4 1.8 0.6 2.1 1.9
 Exports                   14.1 4.3 -1.3 5.6 -2.7 3.8 3.5 3.0 2.9 2.9 2.8 2.8 5.7 1.8 3.0 5.5 1.9 2.8
 Imports                   3.7 4.6 1.1 -1.7 -0.3 3.7 3.2 2.7 2.7 2.6 2.6 2.6 1.0 1.3 2.8 1.9 2.3 2.6
 Change in Non-Farm                                    
 Inventories (2012, $Bn) 41.2 36.1 37.0 26.8 28.8 22.8 19.8 17.3 15.8 14.8 14.3 14.3 35.3 22.1 14.8 -- -- --
 Final Sales 4.9 0.6 0.6 0.2 3.3 3.1 2.2 2.2 2.0 2.0 2.0 2.0 1.4 2.0 2.1 1.6 2.7 2.0
 International Current                                    
 Account Balance ($Bn)  -18.6 -27.0 -19.0 -6.5 -1.0 -3.0 -4.8 -7.1 -8.9 -10.2 -11.3 -12.0 -17.8 -4.0 -10.6 -- -- --
% of GDP  -0.7 -0.9 -0.7 -0.2 0.0 -0.1 -0.2 -0.2 -0.3 -0.3 -0.4 -0.4 -0.6 -0.1 -0.3 -- -- --
 Pre-Tax Corp. Profits -39.2 -25.1 22.1 19.9 -2.6 -2.9 1.2 3.4 5.3 6.6 4.4 4.5 -18.1 3.2 4.0 -9.7 -0.3 5.2
% of GDP  13.2 12.2 12.6 13.0 12.8 12.6 12.5 12.5 12.6 12.7 12.7 12.7 12.8 12.6 12.7 -- -- --
 GDP Deflator (y/y) 2.2 -0.4 1.6 3.0 4.3 4.3 3.1 2.2 2.2 2.1 2.0 2.0 1.6 3.5 2.1 3.0 2.2 2.0
 Nominal GDP  -0.3 3.3 6.5 6.6 3.6 3.4 3.5 3.4 3.6 3.7 3.9 4.0 2.7 4.4 3.6 4.0 3.5 3.8
 Labour Force 3.9 2.7 2.9 2.8 1.9 1.6 1.2 0.9 0.8 0.9 0.9 0.9 2.6 2.0 0.9 3.1 1.4 0.9
 Employment  3.9 1.8 1.7 1.9 1.6 0.4 -0.5 -0.1 1.0 1.3 1.3 1.4 2.4 1.1 0.7 2.3 0.3 1.2
 Change in Empl. ('000s)  192 92 85 93 79 22 -26 -7 49 65 68 71 475 216 137 461 69 253
 Unemployment Rate (%)  5.1 5.3 5.5 5.8 5.8 6.1 6.5 6.7 6.7 6.6 6.5 6.4 5.4 6.3 6.6 -- -- --
 Personal Disp. Income  1.6 4.8 9.1 5.3 6.7 2.9 1.6 2.1 3.3 4.0 4.3 4.0 5.5 4.9 3.1 5.1 3.3 3.9
 Pers. Savings Rate (%)  4.5 5.0 6.3 6.2 6.4 6.2 5.9 5.6 5.6 5.7 5.9 6.0 5.5 6.0 5.8 -- -- --
 Cons. Price Index (y/y) 5.2 3.5 3.7 3.2 3.1 3.0 2.4 2.4 2.3 2.2 2.1 2.0 3.9 2.7 2.1 3.2 2.4 2.0
 CPIX (y/y)** 4.6 3.6 3.1 2.7 2.7 2.5 2.4 2.4 2.3 2.1 2.1 2.0 3.5 2.5 2.1 2.7 2.4 2.0
 BoC Inflation (y/y)*** 4.8 4.0 3.8 3.6 3.4 3.1 2.8 2.6 2.4 2.3 2.2 2.1 4.0 3.0 2.3 3.6 2.6 2.1
 Housing Starts ('000s) 221 246 256 244 237 233 228 221 225 231 235 239 242 230 232 -- -- --
 Home Prices (y/y) -17.3 1.2 3.7 2.8 4.0 -4.2 1.0 4.4 4.6 5.0 4.1 3.6 -3.0 1.2 4.3 2.8 4.4 3.6
 Real GDP / Worker (y/y) -0.9 -1.1 -2.0 -1.4 -1.1 -0.7 0.3 0.9 1.1 1.1 0.7 0.5 -1.3 -0.2 0.9 -1.4 0.9 0.5

U.S. Economic Outlook

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

F: Forecast by TD Economics, March 2024.
* Intellectual Property Products. ** Non-farm business sector.
Source: Bureau of Labor Statistics, Bureau of Economic Analysis, Census Bureau, TD Economics.
Economic Indicators 2023 2024 2025 Annual Average 4th Qtr/4th Qtr
Q1 Q2 Q3 Q4 Q1F Q2F Q3F Q4F Q1F Q2F Q3F Q4F 23 24F 25F 23 24F 25F
 Real GDP 2.2 2.1 4.9 3.2 2.1 1.3 1.0 1.7 1.9 2.1 2.0 2.0 2.5 2.3 1.8 3.1 1.6 2.0
 Consumer Expenditure 3.8 0.8 3.1 3.0 2.6 1.9 1.2 1.5 1.6 1.7 1.9 2.0 2.2 2.2 1.6 2.7 1.8 1.8
Durable Goods             14.0 -0.3 6.7 3.2 -1.3 3.1 1.0 2.4 2.3 2.6 3.1 2.7 4.2 1.9 2.4 5.7 1.3 2.7
 Business Investment 5.7 7.4 1.5 2.4 0.5 0.7 2.9 3.8 4.0 4.2 3.6 3.2 4.4 1.9 3.5 4.2 2.0 3.7
Non-Res. Structures 30.3 16.1 11.2 7.6 2.0 -2.0 3.0 6.0 5.0 4.0 3.0 3.0 13.0 4.5 3.9 16.0 2.2 3.7
Equipment & IPP* -0.9 5.1 -1.2 1.6 0.1 1.5 2.8 3.2 3.7 4.2 3.7 3.3 2.1 1.3 3.4 1.1 1.9 3.7
 Residential Investment -5.3 -2.2 6.7 2.9 5.8 -0.6 1.3 4.2 6.2 7.5 6.0 5.1 -10.6 3.0 4.9 0.4 2.6 6.2
 Govt. Expenditure 4.8 3.3 5.8 4.2 2.5 2.0 1.5 1.0 0.5 0.5 0.6 0.6 4.0 3.0 0.8 4.5 1.7 0.5
 Final Domestic Demand 3.8 2.0 3.5 3.1 2.4 1.7 1.5 1.8 1.9 2.1 2.1 2.0 2.2 2.4 1.9 3.1 1.8 2.0
 Exports                   6.8 -9.3 5.4 6.4 4.0 2.5 2.0 2.5 2.7 3.0 3.1 3.0 2.7 3.1 2.7 2.1 2.7 2.9
 Imports                   1.3 -7.6 4.2 2.7 5.1 3.1 2.2 3.0 2.9 3.3 3.3 3.2 -1.6 2.8 3.0 0.0 3.3 3.2
 Change in Private                                    
 Inventories 27.2 14.9 77.8 66.3 61.6 50.0 31.2 31.6 36.5 41.5 41.5 41.6 46.6 43.6 40.3 -- -- --
 Final Sales 4.6 2.1 3.6 3.5 2.2 1.6 1.4 1.7 1.8 2.0 2.0 2.0 2.9 2.4 1.8 3.4 1.7 1.9
 International Current                                    
 Account Balance ($Bn) -858 -867 -801 -820 -895 -912 -927 -958 -971 -994 -1007 -1013 -837 -923 -996 -- -- --
% of GDP  -3.2 -3.2 -2.9 -2.9 -3.2 -3.2 -3.2 -3.3 -3.3 -3.4 -3.4 -3.3 -3.1 -3.2 -3.3 -- -- --
 Pre-tax Corporate Profits                                    
 Including IVA&CCA -9.9 0.9 14.4 3.3 7.4 -0.1 -6.6 -1.8 1.2 6.1 6.3 5.3 0.7 3.2 1.3 1.8 -0.4 4.7
% of GDP  11.8 11.7 11.9 11.8 11.9 11.8 11.5 11.3 11.3 11.3 11.4 11.4 11.8 11.6 11.3 -- -- --
 GDP Deflator (y/y) 5.3 3.5 3.2 2.6 2.3 2.5 2.2 2.4 2.3 2.3 2.2 2.2 3.6 2.3 2.3 2.6 2.4 2.2
 Nominal GDP  6.3 3.8 8.3 4.9 4.5 3.9 3.4 4.1 4.2 4.3 4.2 4.2 6.3 4.7 4.1 5.8 4.0 4.2
 Labor Force 3.9 1.4 1.9 0.4 -0.8 2.0 1.2 0.4 0.3 0.4 0.6 0.6 1.7 0.7 0.6 1.9 0.7 0.5
 Employment  2.4 2.0 1.7 1.6 1.9 1.4 0.4 0.1 0.3 0.6 0.6 0.6 2.3 1.4 0.4 1.9 0.9 0.5
 Change in Empl. ('000s)  899 753 667 617 735 534 145 21 132 220 238 239 3534 2198 697 2936 1435 829
 Unemployment Rate (%)  3.5 3.6 3.7 3.8 3.8 3.9 4.1 4.2 4.1 4.0 4.0 4.0 3.6 4.0 4.1 -- -- --
 Personal Disp. Income  15.5 5.8 3.1 4.0 4.5 5.4 4.0 4.2 4.6 4.9 5.1 5.2 8.1 4.4 4.7 7.0 4.5 5.0
 Pers. Savings Rate (%)  4.8 5.1 4.3 3.9 3.8 3.8 3.9 4.0 4.2 4.5 4.8 5.1 4.5 3.9 4.6 -- -- --
 Cons. Price Index (y/y) 5.7 4.0 3.6 3.2 3.2 3.4 3.1 3.0 2.6 2.2 2.1 1.9 4.1 3.2 2.2 3.2 3.0 1.9
 Core CPI (y/y) 5.5 5.2 4.4 4.0 3.8 3.5 3.5 3.3 2.8 2.5 2.3 2.2 4.8 3.6 2.4 4.0 3.3 2.2
 Core PCE Price Index (y/y) 4.8 4.6 3.8 3.2 2.7 2.5 2.7 2.7 2.4 2.2 2.1 2.0 4.1 2.7 2.2 3.2 2.7 2.0
 Housing Starts (mns)  1.4 1.4 1.4 1.5 1.4 1.4 1.4 1.4 1.4 1.5 1.5 1.5 1.4 1.4 1.5 -- -- --
 Real Output per Hour** (y/y) -0.7 1.2 2.3 2.6 3.4 2.6 1.5 1.2 0.9 1.2 1.4 1.4 1.3 2.2 1.2 2.6 1.2 1.4

Economic Indicators: G7 & Europe

F: Forecast by TD Economics, March 2024.
* Share of 2021 world gross domestic product (GDP) at PPP.
Source: National Statistics Agencies, TD Economics.
    2022 2023 2024F 2025F
Real GDP (Annual Per Cent Change)
G7 (42.4%)* 2.3 1.7 1.4 1.5
  U.S. 1.9 2.5 2.3 1.8
  Japan 0.9 1.9 0.7 1.1
  Euro Area 3.5 0.5 0.3 1.2
  Germany 1.9 -0.1 0.0 1.3
  France 2.5 0.9 0.5 1.3
  Italy 4.1 1.0 0.5 1.0
  United Kingdom 4.3 0.1 0.2 1.3
  Canada 3.8 1.1 0.9 1.5
Consumer Price Index (Annual Per Cent Change)
G7 7.3 4.7 2.8 2.0
  U.S. 8.0 4.1 3.2 2.2
  Japan 2.5 3.3 2.4 1.5
  Euro Area 8.4 5.4 2.3 2.0
  Germany 8.7 6.0 2.4 2.0
  France 5.9 5.7 2.5 2.0
  Italy 8.7 5.9 1.7 1.8
  United Kingdom 9.1 7.3 2.3 1.9
  Canada 6.8 3.9 2.7 2.1
Unemployment Rate (Per Cent Annual Averages)
  U.S. 3.6 3.6 4.0 4.1
  Japan 2.6 2.6 2.5 2.3
  Euro Area 6.7 6.5 6.9 6.8
  Germany 5.3 5.7 6.0 5.7
  France 7.3 7.4 7.5 7.3
  Italy 8.1 7.7 8.3 8.2
  United Kingdom