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Interest Rate Outlook

F: Forecast by TD Economics, September 2023. All forecasts are end-of-period.
Source: Bloomberg, Bank of Canada, Federal Reserve, TD Economics.
Interest Rates 2023 2024 2025
Q1 Q2 Q3F Q4F Q1F Q2F Q3F Q4F Q1F Q2F Q3F Q4F
Canada                      
Overnight Target Rate  4.50 4.75 5.00 5.00 5.00 4.50 4.00 3.50 3.00 2.50 2.25 2.25
3-mth T-Bill Rate  4.34 4.90 5.00 5.00 4.75 4.25 3.75 3.25 2.75 2.38 2.25 2.25
2-yr Govt. Bond Yield  3.74 4.66 4.70 4.40 4.00 3.70 3.40 3.10 2.80 2.50 2.35 2.35
5-yr Govt. Bond Yield  3.02 3.78 4.00 3.75 3.55 3.30 3.10 2.95 2.75 2.60 2.60 2.60
10-yr Govt. Bond Yield  2.90 3.36 3.70 3.60 3.50 3.35 3.20 3.05 2.90 2.85 2.85 2.85
30-yr Govt. Bond Yield  3.00 3.08 3.50 3.45 3.40 3.35 3.30 3.25 3.20 3.15 3.15 3.15
10-yr-2-yr Govt Spread -0.84 -1.30 -1.00 -0.80 -0.50 -0.35 -0.20 -0.05 0.10 0.35 0.50 0.50
U.S.                       
Fed Funds Target Rate  5.00 5.25 5.50 5.50 5.50 5.25 4.75 4.25 3.75 3.25 2.75 2.75
3-mth T-Bill Rate  4.68 5.17 5.40 5.40 5.30 4.90 4.40 3.90 3.40 2.90 2.65 2.65
2-yr Govt. Bond Yield  4.06 4.87 5.00 4.70 4.40 4.10 3.80 3.50 3.20 2.90 2.75 2.75
5-yr Govt. Bond Yield  3.60 4.13 4.40 4.15 3.85 3.55 3.30 3.15 3.05 2.95 2.95 2.95
10-yr Govt. Bond Yield  3.48 3.81 4.35 4.10 3.90 3.65 3.45 3.35 3.30 3.20 3.20 3.20
30-yr Govt. Bond Yield  3.67 3.85 4.35 4.30 4.20 3.95 3.75 3.65 3.60 3.50 3.50 3.50
10-yr-2-yr Govt Spread -0.58 -1.06 -0.65 -0.60 -0.50 -0.45 -0.35 -0.15 0.10 0.30 0.45 0.45
Canada-U.S. Spreads          
Can - U.S. T-Bill Spread -0.34 -0.27 -0.40 -0.40 -0.55 -0.65 -0.65 -0.65 -0.65 -0.52 -0.40 -0.40
Can - U.S. 10-Year Bond Spread -0.58 -0.45 -0.65 -0.50 -0.40 -0.30 -0.25 -0.30 -0.40 -0.35 -0.35 -0.35

Foreign Exchange Outlook

F: Forecast by TD Economics, September 2023. All forecasts are end-of-period.
Source: Bloomberg, Bank of Canada, Federal Reserve, TD Economics.
Currency Exchange Rate 2023 2024 2025
Q1 Q2 Q3F Q4F Q1F Q2F Q3F Q4F Q1F Q2F Q3F Q4F
Exchange Rate to U.S. Dollar                        
 Euro USD per EUR 1.09 1.09 1.07 1.05 1.04 1.03 1.05 1.07 1.09 1.12 1.14 1.16
 UK Pound USD per GBP 1.24 1.27 1.25 1.22 1.21 1.20 1.22 1.25 1.27 1.30 1.30 1.30
 Japanese Yen JPY per USD 132.8 144.5 147.0 150.0 148.5 147.0 145.5 144.1 142.6 141.2 139.8 138.4
 Chinese Renminbi CNY per USD 6.87 7.25 7.30 7.35 7.40 7.45 7.40 7.30 7.20 7.10 7.00 6.90
Exchange Rate to Canadian Dollar                        
 U.S. Dollar USD per CAD 0.74 0.76 0.74 0.73 0.73 0.72 0.73 0.74 0.76 0.77 0.79 0.80
 Euro CAD per EUR 1.47 1.45 1.46 1.44 1.44 1.43 1.45 1.45 1.45 1.45 1.45 1.45
 UK Pound CAD per GBP 1.67 1.68 1.69 1.67 1.67 1.67 1.69 1.69 1.69 1.69 1.66 1.63
 Japanese Yen JPY per CAD 98.2 109.2 108.1 109.5 107.6 105.8 105.5 106.5 107.6 108.7 109.8 110.7
 Chinese Renminbi CNY per CAD 5.08 5.48 5.37 5.37 5.37 5.36 5.37 5.39 5.44 5.47 5.50 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
Jul-06 % Chg. % Chg.  High Low
S&P 500 4,414 3.3 15.0 4,456 3,577
S&P/TSX Composite 19,799 -0.7 2.1 20,767 18,206
DAX 15,529 -2.7 11.5 16,358 11,976
FTSE 100 7,281 -4.2 -2.3 8,014 6,826
Nikkei 32,773 1.7 25.6 33,753 25,717
MSCI AC World Index* 682 3.0 12.7 685 550

Commodity Price Outlook

F: Forecast by TD Economics, September 2023. All forecasts are period averages.
Source: Bloomberg, TD Economics, USDA (Haver).
Commodity 2023 2024 2025
Q1 Q2 Q3F Q4F Q1F Q2F Q3F Q4F Q1F Q2F Q3F Q4F
Crude Oil (WTI, $US/bbl) 76 74 80 84 82 80 80 78 78 77 76 76
Natural Gas ($US/MMBtu) 2.66 2.16 2.65 2.95 3.15 3.25 3.25 3.55 3.65 3.65 3.75 3.75
Gold ($US/troy oz.) 1889 1977 1930 1975 2000 1975 1950 1900 1900 1875 1850 1825
Silver ($US/troy oz.) 22.56 24.19 23.60 24.25 25.25 24.25 23.50 23.00 23.00 22.70 22.40 22.10
Copper (cents/lb) 405 384 385 390 390 380 375 375 410 410 405 400
Nickel ($US/lb) 11.81 10.13 9.50 9.75 9.75 10.00 10.00 10.00 10.20 9.75 9.50 9.00
Aluminum (cents/lb) 109 103 100 105 110 110 115 115 115 115 111 110
Wheat ($US/bu) 7.32 6.50 6.30 6.50 6.75 6.85 7.00 7.10 7.30 7.20 7.10 7.00

Canadian Economic Outlook

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

F: Forecast by TD Economics, September 2023.
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 Q3F Q4F Q1F Q2F Q3F Q4F Q1F Q2F Q3F Q4F 23F 24F 25F 23F 24F 25F
 Real GDP 2.6 -0.2 1.0 0.5 0.4 0.8 1.1 1.3 1.5 1.7 1.8 1.9 1.2 0.7 1.5 1.0 0.9 1.7
 Consumer Expenditure 4.7 0.2 1.4 0.6 0.1 0.4 0.7 0.9 1.1 1.2 1.3 1.4 2.2 0.6 1.1 1.7 0.5 1.3
Durable Goods             7.5 -2.0 2.0 0.3 -1.0 0.0 0.5 0.7 0.9 1.0 1.1 1.2 3.1 0.0 0.8 1.9 0.1 1.1
 Business Investment 6.0 8.8 2.4 -2.1 -1.0 0.0 1.1 1.6 2.0 2.5 2.8 3.0 3.1 0.4 1.9 3.7 0.4 2.6
Non-Res. Structures 8.8 9.9 4.0 -3.0 -2.0 -0.5 1.0 1.7 2.3 2.8 3.0 3.1 7.9 0.1 2.1 4.8 0.1 2.8
Equipment & IPP* 3.0 7.8 0.8 -1.1 0.1 0.6 1.2 1.5 1.8 2.2 2.5 2.9 -2.0 0.7 1.8 2.6 0.8 2.3
 Residential Investment -19.1 -8.2 -8.0 -4.0 2.0 2.5 3.0 3.5 4.0 3.7 3.4 3.1 -14.0 -0.8 3.5 -10.0 2.7 3.5
 Govt. Expenditure -1.7 2.0 2.7 2.4 2.2 2.1 2.0 2.0 2.0 1.9 1.9 1.9 1.3 2.2 2.0 1.3 2.1 1.9
 Final Domestic Demand 1.2 1.0 1.2 0.5 0.6 0.9 1.2 1.4 1.6 1.7 1.7 1.8 0.7 0.9 1.5 1.0 1.0 1.7
 Exports                   10.2 0.4 -3.6 2.5 1.6 1.8 2.0 2.2 2.2 2.3 2.3 2.3 4.5 1.2 2.2 2.3 1.9 2.3
 Imports                   0.7 1.9 -5.0 2.1 1.3 1.5 1.7 1.9 2.0 2.1 2.1 2.2 -1.2 0.8 2.0 -0.1 1.6 2.1
 Change in Non-Farm                                    
 Inventories (2012, $Bn) 21.2 14.8 9.8 9.1 8.0 6.8 5.6 4.4 3.4 2.9 2.8 3.3 13.8 6.2 3.1 -- -- --
 Final Sales 2.8 1.9 2.2 0.6 0.9 1.1 1.4 1.7 1.8 1.8 1.8 1.7 2.1 1.2 1.7 1.9 1.3 1.8
 International Current                                    
 Account Balance ($Bn)  -12.7 -26.5 -25.9 -24.0 -24.5 -25.6 -27.5 -30.3 -32.5 -34.2 -35.6 -36.7 -22.3 -27.0 -34.8 -- -- --
% of GDP  -0.5 -0.9 -0.9 -0.8 -0.8 -0.9 -0.9 -1.0 -1.1 -1.1 -1.2 -1.2 -0.8 -0.9 -1.1 -- -- --
 Pre-Tax Corp. Profits -25.9 -26.7 -12.9 -3.8 -4.5 -4.4 0.5 3.3 5.5 7.1 9.1 8.9 -23.8 -6.0 4.8 -17.9 -1.3 7.7
% of GDP  12.4 11.4 10.9 10.7 10.5 10.3 10.3 10.3 10.3 10.4 10.5 10.6 11.4 10.3 10.5 -- -- --
 GDP Deflator (y/y) 1.3 -1.1 0.9 2.4 2.9 2.8 2.6 2.3 2.1 2.0 2.0 2.0 0.9 2.6 2.0 2.4 2.3 2.0
 Nominal GDP  3.1 2.7 4.1 3.6 3.0 3.2 3.3 3.3 3.5 3.7 3.8 3.9 2.1 3.3 3.5 3.4 3.2 3.7
 Labour Force 4.3 2.4 2.6 1.2 1.0 0.9 1.0 1.1 1.1 1.0 1.0 0.9 2.4 1.3 1.0 2.6 1.0 1.0
 Employment  4.7 1.6 1.0 -0.1 -0.1 -0.4 -0.1 0.7 1.2 1.4 1.4 1.3 2.3 0.1 0.9 1.8 0.0 1.3
 Change in Empl. ('000s)  231 80 52 -4 -6 -19 -4 36 61 72 70 68 444 30 188 359 7 271
 Unemployment Rate (%)  5.0 5.2 5.5 5.8 6.1 6.4 6.7 6.7 6.7 6.6 6.5 6.4 5.4 6.5 6.6 -- -- --
 Personal Disp. Income  -2.5 10.7 10.8 -0.4 0.8 0.5 1.2 2.3 2.8 3.2 3.3 3.4 4.9 2.4 2.5 4.5 1.2 3.2
 Pers. Savings Rate (%)  3.7 5.1 6.2 5.3 4.8 4.2 3.8 3.6 3.4 3.4 3.3 3.3 5.1 4.1 3.3 -- -- --
 Cons. Price Index (y/y) 5.2 3.5 3.4 3.1 3.3 3.0 2.6 2.4 2.2 2.1 2.0 2.0 3.8 2.8 2.1 3.1 2.4 2.0
 CPIX (y/y)** 4.7 3.6 3.3 3.2 3.3 3.1 2.8 2.6 2.4 2.2 2.1 2.1 3.7 3.0 2.2 3.2 2.6 2.1
 BoC Inflation (y/y)*** 4.8 3.9 3.6 3.5 3.4 3.1 2.9 2.7 2.4 2.2 2.1 2.0 3.9 3.0 2.1 3.5 2.7 2.0
 Housing Starts ('000s) 223 249 240 230 221 216 212 209 215 221 225 229 236 215 223 -- -- --
 Home Prices (y/y) -17.3 1.3 4.0 2.7 2.4 -4.6 0.1 4.5 6.3 5.5 5.1 4.6 -3.0 0.5 5.4 2.7 4.5 4.6
 Real GDP / Worker (y/y) -0.6 -1.0 -1.5 -0.8 -0.2 0.5 0.8 0.9 0.8 0.6 0.4 0.4 -1.0 0.5 0.5 -0.8 0.9 0.4

U.S. Economic Outlook

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

F: Forecast by TD Economics, September 2023.
* 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 Q3F Q4F Q1F Q2F Q3F Q4F Q1F Q2F Q3F Q4F 23F 24F 25F 23F 24F 25F
 Real GDP 2.0 2.1 3.7 0.9 0.4 0.6 1.4 1.9 1.9 1.9 1.9 1.9 2.3 1.3 1.7 2.2 1.0 1.9
 Consumer Expenditure 4.2 1.7 3.7 1.3 0.4 0.6 1.2 1.5 1.7 1.8 1.8 1.8 2.5 1.3 1.6 2.7 0.9 1.8
Durable Goods             16.3 -0.3 6.4 4.0 -1.7 -2.9 0.9 2.8 3.0 3.1 3.1 3.1 4.3 0.8 2.4 6.4 -0.3 3.1
 Business Investment 0.6 6.2 1.2 0.4 0.9 1.0 4.4 4.9 3.7 3.3 2.9 2.8 3.0 1.9 3.6 2.1 2.8 3.2
Non-Res. Structures 15.8 11.3 5.0 0.0 -3.0 -5.0 8.0 10.0 5.0 3.0 2.0 2.0 8.0 1.1 4.7 7.8 2.3 3.0
Equipment & IPP* -0.9 4.8 0.2 0.6 2.0 2.6 3.4 3.6 3.3 3.3 3.1 3.1 2.2 2.1 3.3 1.1 2.9 3.2
 Residential Investment -4.0 -3.6 4.4 -4.8 -3.4 0.2 3.0 6.2 8.6 11.5 8.9 7.4 -11.6 -0.7 7.4 -2.0 1.4 9.1
 Govt. Expenditure 5.0 3.3 1.9 1.5 1.3 1.0 0.8 0.6 0.5 0.4 0.5 0.5 3.3 1.4 0.6 2.9 0.9 0.5
 Final Domestic Demand 3.5 2.3 3.1 1.0 0.5 0.7 1.6 2.0 2.0 2.1 2.0 1.9 2.1 1.3 1.9 2.5 1.2 2.0
 Exports                   7.8 -10.6 7.0 1.0 -1.0 0.1 0.7 2.7 3.1 3.0 3.1 3.0 2.5 0.4 2.5 1.0 0.6 3.1
 Imports                   2.0 -7.0 5.6 2.9 0.7 1.5 2.6 4.1 4.4 3.9 3.2 2.7 -1.9 1.8 3.6 0.8 2.2 3.6
 Change in Private                                    
 Inventories 3.5 -1.8 24.0 32.4 37.5 41.3 41.6 46.0 50.4 50.0 49.6 49.2 14.5 41.6 49.8 -- -- --
 Final Sales 4.2 2.2 3.2 0.7 0.3 0.5 1.4 1.8 1.8 2.0 1.9 1.9 2.7 1.1 1.7 2.6 1.0 1.9
 International Current                                    
 Account Balance ($Bn) -877 -849 -794 -837 -823 -829 -844 -864 -880 -903 -920 -932 -840 -840 -909 -- -- --
% of GDP  -3.3 -3.2 -2.9 -3.0 -3.0 -3.0 -3.0 -3.0 -3.1 -3.1 -3.1 -3.1 -3.1 -3.0 -3.1 -- -- --
 Pre-tax Corporate Profits                                    
 Including IVA&CCA -15.5 -1.5 27.1 2.2 -14.0 -6.5 -0.8 2.0 4.9 6.5 7.8 7.2 -1.7 -1.7 3.7 2.0 -5.0 6.6
% of GDP  10.6 10.5 11.0 10.9 10.4 10.2 10.1 10.0 10.0 10.1 10.2 10.2 10.7 10.2 10.1 -- -- --
 GDP Deflator (y/y) 5.3 3.6 3.1 2.9 2.5 2.7 2.6 2.5 2.4 2.2 2.2 2.2 3.7 2.6 2.2 2.9 2.5 2.2
 Nominal GDP  6.1 4.1 6.3 3.7 3.1 3.3 3.8 4.2 4.1 4.1 4.2 4.2 6.0 3.8 4.0 5.0 3.6 4.1
 Labor Force 3.8 1.3 2.0 1.6 0.7 0.5 0.4 0.4 0.4 0.4 0.3 0.3 1.8 1.0 0.4 2.2 0.5 0.4
 Employment  2.5 1.7 1.5 0.9 0.3 -0.5 -0.5 -0.3 0.6 0.9 0.8 0.8 2.3 0.4 0.3 1.6 -0.2 0.8
 Change in Empl. ('000s)  966 666 571 334 134 -188 -201 -124 253 357 311 306 3488 564 512 2537 -379 1227
 Unemployment Rate (%)  3.5 3.5 3.6 3.8 3.9 4.1 4.3 4.5 4.4 4.3 4.2 4.1 3.6 4.2 4.2 -- -- --
 Personal Disp. Income  12.9 5.9 3.7 4.3 4.8 3.2 3.6 3.9 4.8 4.4 4.5 4.5 7.5 4.1 4.3 6.7 3.9 4.5
 Pers. Savings Rate (%)  4.3 4.5 3.6 3.3 3.7 3.8 3.8 3.9 4.1 4.3 4.5 4.6 3.9 3.8 4.4 -- -- --
 Cons. Price Index (y/y) 5.8 4.1 3.5 3.5 3.1 2.9 2.7 2.2 2.1 2.0 2.0 2.0 4.2 2.7 2.0 3.5 2.2 2.0
 Core CPI (y/y) 5.6 5.2 4.4 4.0 3.6 3.1 3.0 2.8 2.6 2.4 2.3 2.3 4.8 3.1 2.4 4.0 2.8 2.3
 Core PCE Price Index (y/y) 4.6 4.4 4.0 3.7 3.2 2.9 2.8 2.5 2.3 2.2 2.1 2.0 4.2 2.8 2.2 3.7 2.5 2.0
 Housing Starts (mns)  1.39 1.44 1.44 1.40 1.38 1.31 1.30 1.31 1.35 1.37 1.40 1.43 1.42 1.33 1.39 -- -- --
 Real Output per Hour** (y/y) -0.6 1.3 1.6 1.1 1.4 0.8 0.6 1.2 1.5 1.4 1.2 0.9 0.9 1.0 1.2 1.1 1.2 0.9

Economic Indicators: G7 & Europe

F: Forecast by TD Economics, September 2023.
* Share of 2021 world gross domestic product (GDP) at PPP.
Source: National Statistics Agencies, TD Economics.
    2022 2023F 2024F 2025F
Real GDP (Annual Per Cent Change)
G7 (30.8%)* 2.3 1.5 1.0 1.5
  U.S. 2.1 2.3 1.3 1.7
  Japan 1.0 1.8 1.0 1.0
  Euro Area 3.4 0.6 0.6 1.2
  Germany 1.9 -0.3 0.5 1.3
  France 2.5 0.7 0.6 1.4
  Italy 3.8 0.7 0.5 0.9
  United Kingdom 4.1 0.3 0.6 1.6
  Canada 3.4 1.2 0.7 1.5
Consumer Price Index (Annual Per Cent Change)
G7 7.3 4.7 2.6 1.9
  U.S. 8.0 4.2 2.7 2.0
  Japan 2.5 3.1 1.9 1.5
  Euro Area 8.4 5.4 2.5 2.0
  Germany 8.7 6.1 2.7 2.0
  France 5.9 5.7 2.4 2.0
  Italy 8.7 6.4 2.2 1.8
  United Kingdom 9.1 7.4 2.9 1.8
  Canada 6.8 3.8 2.8 2.1
Unemployment Rate (Per Cent Annual Averages)
  U.S. 3.6 3.6 4.2 4.2
  Japan 2.6 2.6 2.4 2.3
  Euro Area 6.7 6.7 7.4 7.0
  Germany 5.3 5.7 5.9 5.5
  France 7.3 7.4 7.8 7.5
  Italy 8.1 7.8 8.6 8.2
  United Kingdom 3.7 4.3 4.9 4.4
  Canada 5.3 5.4 6.5 6.6
 

Global Economic Outlook

[Annual Per Cent Change Unless Otherwise Indicated]

F: Forecast by TD Economics, September 2023.
* Share of 2021 world gross domestic product (GDP) at PPP.
** Forecast for India refers to fiscal year.
Source: International Monetary Fund, TD Economics.
2021 Share* Forecast
Real GDP (%) 2023F 2024F 2025F
World 100.0 3.1 2.6 2.9
North America 19.0 2.2 1.3 1.8
   United States 15.8 2.3 1.3 1.7
   Canada 1.4 1.2 0.7 1.5
   Mexico 1.8 2.9 1.8 2.2
European Union (EU-27) 14.8 0.7 0.9 1.4
   Euro Area (EU-20) 12.0 0.6 0.6 1.2
        Germany 3.3 -0.3 0.5 1.3
        France  2.3 0.7 0.6 1.4
        Italy 1.9 0.7 0.5 0.9
   Other EU Members 2.8 0.3 1.9 2.2
United Kingdom 2.3 0.3 0.6 1.6
Asia 44.0 4.3 3.9 4.0
   Japan 3.8 1.8 1.0 1.0
   Asian NIC's 3.5 1.2 2.3 2.2
        Hong Kong 0.3 4.0 2.1 2.4
        Korea 1.7 1.2 2.2 2.3
        Singapore  0.4 0.8 2.7 2.5
        Taiwan 1.0 0.3 2.4 2.1
   Russia 3.1 1.7 1.5 1.0
   Australia & New Zealand 1.2 1.6 1.5 2.4
   Emerging Asia 32.5 5.3 4.8 4.9
        ASEAN-5 5.5 4.5 5.1 5.1
        China 18.5 5.0 4.2 4.3
        India** 7.0 6.7 6.0 6.3
Central/South America