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Interest Rate Outlook

F: Forecast by TD Economics, June 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 Q1 Q2F Q3F Q4F Q1F Q2F Q3F Q4F
Canada                        
Overnight Target Rate  4.50 4.75 5.00 5.00 5.00 4.75 4.50 4.25 3.75 3.25 3.00 2.75
3-mth T-Bill Rate  4.34 4.90 5.07 5.04 4.99 4.63 4.38 4.00 3.50 3.13 2.88 2.63
2-yr Govt. Bond Yield  3.74 4.58 4.87 3.88 4.17 3.95 3.65 3.35 3.05 2.75 2.45 2.40
5-yr Govt. Bond Yield  3.02 3.68 4.25 3.17 3.51 3.45 3.45 3.25 3.05 2.90 2.75 2.65
10-yr Govt. Bond Yield  2.90 3.26 4.03 3.10 3.45 3.40 3.40 3.30 3.20 3.05 2.95 2.85
30-yr Govt. Bond Yield  3.00 3.08 3.81 3.02 3.37 3.30 3.30 3.25 3.20 3.15 3.15 3.15
10-yr-2-yr Govt Spread -0.84 -1.32 -0.84 -0.78 -0.72 -0.55 -0.25 -0.05 0.15 0.30 0.50 0.45
U.S.                         
Fed Funds Target Rate  5.00 5.25 5.50 5.50 5.50 5.50 5.50 5.25 5.00 4.50 4.00 3.50
3-mth T-Bill Rate  4.68 5.17 5.32 5.20 5.23 5.25 5.25 5.05 4.65 4.15 3.65 3.15
2-yr Govt. Bond Yield  4.06 4.87 5.03 4.23 4.59 4.70 4.50 4.30 4.00 3.70 3.40 3.10
5-yr Govt. Bond Yield  3.60 4.13 4.60 3.84 4.21 4.30 4.30 4.10 3.85 3.60 3.40 3.20
10-yr Govt. Bond Yield  3.48 3.81 4.59 3.88 4.20 4.30 4.30 4.15 3.95 3.75 3.60 3.45
30-yr Govt. Bond Yield  3.67 3.85 4.73 4.03 4.34 4.45 4.45 4.35 4.25 4.05 3.90 3.75
10-yr-2-yr Govt Spread -0.58 -1.06 -0.44 -0.35 -0.39 -0.40 -0.20 -0.15 -0.05 0.05 0.20 0.35
Canada - U.S. Spreads                        
Can - U.S. T-Bill Spread -0.34 -0.27 -0.25 -0.16 -0.24 -0.62 -0.87 -1.05 -1.15 -1.02 -0.77 -0.52
Can - U.S. 10-Year Bond Spread -0.58 -0.55 -0.56 -0.78 -0.75 -0.90 -0.90 -0.85 -0.8 -0.7 -0.7 -0.6

Foreign Exchange Outlook

F: Forecast by TD Economics, June 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 Q1 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 1.07 1.04 1.03 1.05 1.07 1.09 1.12
 UK Pound USD per GBP 1.24 1.27 1.22 1.27 1.26 1.27 1.23 1.22 1.25 1.27 1.30 1.30
 Japanese Yen JPY per USD 132.8 144.5 149.4 140.9 151.2 157.0 156.0 155.0 154.0 152.5 150.9 149.4
 Chinese Renminbi CNY per USD 6.87 7.25 7.30 7.10 7.22 7.24 7.30 7.35 7.30 7.25 7.20 7.15
Exchange Rate to Canadian Dollar                        
 U.S. Dollar USD per CAD 0.74 0.76 0.74 0.76 0.74 0.73 0.72 0.72 0.73 0.73 0.74 0.75
 Euro CAD per EUR 1.47 1.45 1.43 1.46 1.46 1.48 1.45 1.43 1.45 1.46 1.48 1.49
 UK Pound CAD per GBP 1.67 1.68 1.65 1.68 1.71 1.75 1.72 1.70 1.72 1.73 1.75 1.74
 Japanese Yen JPY per CAD 98.2 109.2 110.4 106.7 111.7 113.8 112.2 111.5 111.9 111.9 111.8 111.5
 Chinese Renminbi CNY per CAD 5.08 5.48 5.39 5.37 5.34 5.25 5.25 5.28 5.31 5.32 5.34 5.33

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
May-01 % Chg. % Chg.  High Low
S&P 500 5,057 -3.8 6.0 5,254 4,061
S&P/TSX Composite 21,793 -1.7 4.0 22,362 18,737
DAX 17,932 -3.0 7.0 18,492 14,687
FTSE 100 8,121 2.1 5.0 8,147 7,257
Nikkei 38,274 -5.2 14.4 40,888 28,950
MSCI AC World Index* 757 -3.4 4.1 784 629

Commodity Price Outlook

F: Forecast by TD Economics, June 2024. All forecasts are period averages.
Source: Bloomberg, TD Economics, USDA (Haver).

Commodity 2023 2024 2025
Q1 Q2 Q3 Q4 Q1 Q2F Q3F Q4F Q1F Q2F Q3F Q4F
Crude Oil (WTI, $US/bbl) 76 74 82 78 77 80 82 80 78 78 78 76
Natural Gas ($US/MMBtu) 2.66 2.16 2.59 2.75 2.23 2.30 2.60 2.80 3.00 3.10 3.10 3.20
Gold ($US/troy oz.) 1889 1977 1928 1977 2072 2325 2350 2350 2350 2325 2275 2175
Silver ($US/troy oz.) 22.56 24.19 23.58 23.27 23.37 29.00 31.00 31.00 31.00 30.00 29.00 28.00
Copper (cents/lb) 405 384 379 371 383 440 445 450 445 435 435 430
Nickel ($US/lb) 11.81 10.13 9.23 7.81 7.52 8.36 8.15 7.95 7.70 7.70 7.70 7.70
Aluminum (cents/lb) 109 103 98 99 100 110 108 110 112 112 115 115
Wheat ($US/bu) 7.32 6.50 5.76 5.89 5.87 6.10 6.30 6.20 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, June 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 Q1 Q2F Q3F Q4F Q1F Q2F Q3F Q4F 23 24F 25F 23 24F 25F
 Real GDP 3.4 0.7 -0.3 0.1 1.7 2.0 1.2 1.3 1.5 1.6 1.7 1.9 1.2 1.0 1.5 1.0 1.5 1.6
 Consumer Expenditure 2.9 0.5 0.1 3.2 3.0 0.7 1.1 0.9 1.0 1.1 1.2 1.5 1.7 1.7 1.0 1.7 1.4 1.2
Durable Goods             2.1 -2.6 4.4 8.7 0.4 -4.0 2.0 0.9 1.0 1.1 1.2 1.3 2.1 1.6 0.8 3.1 -0.2 1.2
 Business Investment 3.3 10.8 -13.9 -10.4 4.5 4.3 3.5 3.5 3.3 3.4 3.3 3.3 -0.5 -0.8 3.5 -3.1 4.0 3.3
Non-Res. Structures 2.4 11.9 -13.3 -14.7 1.9 4.0 3.0 3.5 3.6 3.7 3.6 3.5 2.6 -2.3 3.5 -4.0 3.1 3.6
Equipment & IPP* 4.2 9.8 -14.7 -5.9 7.1 4.6 4.0 3.6 3.0 3.1 3.1 3.1 -3.7 0.7 3.4 -2.1 4.8 3.1
 Residential Investment -14.2 -4.1 9.8 -2.3 1.3 -4.0 1.5 3.5 4.5 4.1 3.7 3.4 -10.3 0.4 3.1 -3.1 0.5 3.9
 Govt. Expenditure 4.3 0.0 4.3 -1.6 2.1 2.5 2.5 2.4 2.3 2.2 2.1 2.1 2.1 1.7 2.3 1.7 2.4 2.2
 Final Domestic Demand 1.7 1.2 0.2 0.0 2.9 1.2 1.7 1.7 1.8 1.8 1.8 1.9 0.5 1.4 1.7 0.8 1.9 1.8
 Exports                   15.6 3.1 -3.2 3.2 1.9 1.8 4.0 3.5 3.3 3.2 3.1 3.0 5.4 1.9 3.3 4.5 2.8 3.2
 Imports                   2.3 5.7 -0.2 0.9 1.5 1.3 3.7 3.2 3.1 3.0 2.9 2.9 0.9 1.8 3.0 2.1 2.4 3.0
 Change in Non-Farm                                    
 Inventories (2012, $Bn) 40.7 35.1 43.2 40.3 30.8 31.8 28.6 26.1 24.9 23.4 22.4 21.9 39.8 29.3 23.1 -- -- --
 Final Sales 4.1 1.5 -1.0 0.7 4.7 0.5 2.3 2.2 2.1 2.1 2.0 2.0 1.2 1.8 2.0 1.3 2.4 2.1
 International Current                                    
 Account Balance ($Bn)  -14.9 -27.0 -24.0 -18.0 -16.4 -15.1 -14.3 -15.9 -15.9 -15.6 -15.2 -14.9 -21.0 -15.4 -15.4 -- -- --
% of GDP  -0.5 -0.9 -0.8 -0.6 -0.6 -0.5 -0.5 -0.5 -0.5 -0.5 -0.5 -0.5 -0.7 -0.5 -0.5 -- -- --
 Pre-Tax Corp. Profits -37.4 -24.6 23.7 17.1 -29.4 -2.2 1.5 3.5 5.4 6.8 5.8 5.9 -17.4 -4.8 4.4 -9.1 -7.7 6.0
% of GDP  13.3 12.3 12.8 13.1 12.0 11.8 11.7 11.7 11.8 11.9 11.9 12.0 12.9 11.8 11.9 -- -- --
 GDP Deflator (y/y) 2.1 -0.4 1.5 3.0 3.5 3.4 2.5 1.5 2.4 2.3 2.1 2.1 1.5 2.7 2.2 3.0 1.5 2.1
 Nominal GDP  0.3 3.5 6.1 6.1 0.3 4.6 3.9 3.5 3.6 3.8 3.8 4.0 2.8 3.8 3.8 4.0 3.1 3.8
 Labour Force 3.9 2.7 2.9 2.8 2.0 4.1 2.1 0.9 0.7 0.5 0.3 0.3 2.6 2.6 1.0 3.1 2.3 0.5
 Employment  3.9 1.8 1.7 1.9 1.5 2.4 0.7 0.3 0.8 0.9 0.7 0.7 2.4 1.6 0.8 2.3 1.2 0.8
 Change in Empl. ('000s)  192 92 85 93 76 120 34 17 41 48 38 38 475 323 165 461 248 164
 Unemployment Rate (%)  5.1 5.3 5.5 5.8 5.9 6.3 6.6 6.7 6.7 6.6 6.5 6.4 5.4 6.3 6.6 -- -- --
 Personal Disp. Income  0.7 5.7 9.6 5.6 7.4 7.3 3.2 2.3 2.0 2.4 2.1 2.0 5.5 6.3 2.6 5.4 5.0 2.1
 Pers. Savings Rate (%)  4.5 4.9 6.5 6.2 6.9 7.9 7.8 7.6 7.4 7.2 6.9 6.6 5.5 7.5 7.0 -- -- --
 Cons. Price Index (y/y) 5.2 3.5 3.7 3.2 2.9 2.7 2.2 2.1 2.3 2.3 2.1 2.0 3.9 2.5 2.2 3.2 2.1 2.0
 CPIX (y/y)** 4.6 3.6 3.1 2.7 2.2 1.7 1.6 1.6 1.9 2.2 2.1 2.0 3.5 1.8 2.1 2.7 1.6 2.0
 BoC Inflation (y/y)*** 4.9 4.0 3.8 3.6 3.2 2.6 2.5 2.4 2.3 2.2 2.1 2.0 4.1 2.6 2.1 3.6 2.4 2.0
 Housing Starts ('000s) 221 246 256 244 244 239 229 223 223 229 234 239 242 234 231 -- -- --
 Home Prices (y/y) -17.4 0.8 3.9 3.1 4.2 -3.7 0.2 3.4 4.5 5.8 6.3 6.3 -3.1 0.9 5.7 3.1 3.4 6.3
 Real GDP / Worker (y/y) -0.7 -0.9 -1.7 -1.3 -1.2 -1.0 -0.4 0.3 0.4 0.7 0.8 0.8 -1.1 -0.6 0.7 -1.3 0.3 0.8

U.S. Economic Outlook

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

F: Forecast by TD Economics, June 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 Q1 Q2F Q3F Q4F Q1F Q2F Q3F Q4F 23 24F 25F 23 24F 25F
 Real GDP 2.2 2.1 4.9 3.4 1.3 1.9 1.7 1.9 2.0 2.0 2.2 2.2 2.5 2.4 2.0 3.1 1.7 2.1
 Consumer Expenditure 3.8 0.8 3.1 3.3 2.0 2.1 1.8 1.6 1.9 2.0 1.9 2.1 2.2 2.3 1.9 2.7 1.9 2.0
Durable Goods             14.0 -0.3 6.7 3.2 -4.1 2.2 1.6 1.2 2.9 2.5 2.5 2.7 4.2 1.0 2.2 5.8 0.2 2.6
 Business Investment 5.7 7.4 1.5 3.8 3.3 3.4 3.4 4.1 4.2 4.0 4.1 3.4 4.5 3.5 3.9 4.6 3.5 3.9
Non-Res. Structures 30.3 16.1 11.2 10.9 0.4 -2.0 3.0 6.0 5.0 3.0 3.0 3.0 13.2 4.7 3.7 16.9 1.8 3.5
Equipment & IPP* -0.9 5.1 -1.2 1.7 4.2 5.0 3.5 3.5 4.0 4.2 4.5 3.5 2.2 3.1 4.0 1.1 4.1 4.1
 Residential Investment -5.3 -2.2 6.7 2.8 15.4 -5.1 -3.3 2.9 5.0 5.6 7.1 6.7 -10.6 3.6 3.4 0.4 2.2 6.1
 Govt. Expenditure 4.8 3.3 5.8 4.6 1.3 1.5 1.3 1.0 0.7 0.4 0.4 0.4 4.1 2.6 0.8 4.6 1.3 0.5
 Final Domestic Demand 3.8 2.0 3.5 3.5 2.5 1.9 1.7 1.9 2.1 2.1 2.2 2.2 2.3 2.5 2.0 3.2 2.0 2.1
 Exports                   6.8 -9.3 5.4 5.0 1.2 -0.3 2.2 3.3 3.4 3.8 3.8 3.8 2.6 1.7 3.2 1.8 1.6 3.7
 Imports                   1.3 -7.6 4.2 2.2 7.7 5.0 3.3 3.2 3.2 3.1 3.1 3.0 -1.7 3.9 3.3 -0.1 4.8 3.1
 Change in Private                                    
 Inventories 27.2 14.9 77.8 54.9 30.9 62.4 68.5 69.6 64.0 58.4 57.1 55.8 43.7 57.9 58.8 -- -- --
 Final Sales 4.6 2.1 3.6 3.9 1.7 1.2 1.5 1.8 2.1 2.1 2.2 2.2 2.9 2.3 2.0 3.5 1.6 2.2
 International Current                                    
 Account Balance ($Bn) -851 -860 -786 -779 -841 -1002 -1061 -1073 -1080 -1073 -1062 -1049 -819 -995 -1066 -- -- --
% of GDP  -3.2 -3.2 -2.8 -2.8 -3.0 -3.5 -3.7 -3.7 -3.7 -3.6 -3.5 -3.4 -3.0 -3.5 -3.6 -- -- --
 Pre-tax Corporate Profits                                    
 Including IVA&CCA -9.9 0.9 14.4 17.3 -2.4 -2.0 -3.4 1.7 -1.1 0.2 1.9 1.2 1.5 3.4 -0.2 5.1 -1.5 0.6
% of GDP  11.8 11.7 11.9 12.2 12.0 11.8 11.6 11.5 11.4 11.2 11.2 11.1 11.9 11.7 11.2 -- -- --
 GDP Deflator (y/y) 5.3 3.5 3.2 2.6 2.4 2.7 2.5 2.7 2.5 2.4 2.3 2.3 3.6 2.6 2.4 2.6 2.7 2.3
 Nominal GDP  6.3 3.8 8.3 5.1 4.3 4.7 4.2 4.4 4.3 4.3 4.5 4.5 6.3 5.0 4.4 5.9 4.4 4.4
 Labor Force 3.9 1.4 1.9 0.4 -0.6 0.7 0.9 0.8 0.8 0.8 0.7 0.7 1.7 0.6 0.8 1.9 0.5 0.7
 Employment  2.4 2.0 1.7 1.6 2.0 1.8 1.4 1.0 0.9 0.9 0.9 0.9 2.3 1.7 1.0 1.9 1.6 0.9
 Change in Empl. ('000s)  899 753 667 617 772 698 551 414 356 360 361 362 3534 2659 1658 2936 2435 1439
 Unemployment Rate (%)  3.5 3.6 3.7 3.8 3.8 3.9 3.9 4.0 4.0 4.0 4.0 4.0 3.6 3.9 4.0 -- -- --
 Personal Disp. Income  15.5 5.8 3.1 2.7 5.3 3.6 4.3 4.4 5.3 4.8 4.9 5.1 8.0 4.1 4.7 6.7 4.4 5.0
 Pers. Savings Rate (%)  4.8 5.1 4.3 3.7 3.8 3.5 3.6 3.7 4.0 4.2 4.5 4.7 4.5 3.7 4.3 -- -- --
 Cons. Price Index (y/y) 5.7 4.0 3.6 3.2 3.2 3.4 3.2 3.1 2.6 2.2 2.1 2.1 4.1 3.2 2.2 3.2 3.1 2.1
 Core CPI (y/y) 5.5 5.2 4.4 4.0 3.8 3.6 3.6 3.4 3.0 2.6 2.4 2.2 4.8 3.6 2.5 4.0 3.4 2.2
 Core PCE Price Index (y/y) 4.8 4.6 3.8 3.2 2.8 2.7 2.8 2.9 2.5 2.3 2.1 2.0 4.1 2.8 2.2 3.2 2.9 2.0
 Housing Starts (mns)  1.4 1.5 1.4 1.5 1.4 1.4 1.4 1.4 1.4 1.4 1.5 1.5 1.4 1.4 1.5 -- -- --
 Real Output per Hour** (y/y) -0.5 1.3 2.4 2.7 2.8 2.2 1.4 0.9 1.3 1.4 1.6 1.7 1.5 1.8 1.5 2.7 0.9 1.7

Economic Indicators: G7 & Europe

F: Forecast by TD Economics, June 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 1.5 1.6
  U.S. 1.9 2.5 2.4 2.0
  Japan 1.0 1.8 0.4 1.2
  Euro Area 3.5 0.6 0.7 1.2
  Germany 1.9 0.0 0.2 1.3
  France 2.6 1.1 0.9 1.3
  Italy 4.1 1.0 0.9 1.0
  United Kingdom 4.3 0.1 0.7 1.3
  Canada 3.8 1.2 1.0 1.5
Consumer Price Index (Annual Per Cent Change)
G7 7.3 4.7 2.8 2.1
  U.S. 8.0 4.1 3.2 2.2
  Japan 2.5 3.3 2.2 1.6
  Euro Area 8.4 5.4 2.5 2.1
  Germany 8.7 6.0 2.5 2.1
  France 5.9 5.7 2.6 2.0
  Italy 8.7 5.9 1.2 1.8
  United Kingdom 9.1 7.3 2.5 2.2
  Canada 6.8 3.9 2.5 2.2
Unemployment Rate (Per Cent Annual Averages)
  U.S. 3.6 3.6 3.9 4.0
  Japan 2.6 2.6 2.5 2.3
  Euro Area 6.8 6.6 6.6 6.5
  Germany 5.3 5.7 6.0 5.7
  France 7.3 7.3 7.5 7.2
  Italy 8.1 7.7 7.5 7.9
  United Kingdom 3.9 4.0 4.6 4.7
  Canada 5.3 5.4 6.3 6.6
 

Global Economic Outlook

[Annual Per Cent Change Unless Otherwise Indicated]

F: Forecast by TD Economics, June 2024.
* Share of 2021 world gross domestic product (GDP) at PPP. Forecast for India refers to fiscal year.
Source: International Monetary Fund, TD Economics.
2022 Share* Forecast
Real GDP (%) 2023 2024F 2025F
World 100.0 3.2 3.0 3.0
North America 18.9 2.5 2.2 1.9
   United States 15.5 2.5 2.4 2.0
   Canada 1.4 1.2 1.0 1.5
   Mexico 1.9 3.2 2.1 2.2
European Union (EU-27) 14.9 0.6 0.9 1.6
   Euro Area (EU-20) 12.0 0.6