August 27, A recap of last week s top economic news and what s to come

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1 A recap of last week s top economic news and what s to come Fed Chairman stays the course U.S. Federal Reserve (Fed) Chairman Jerome Powell delivered a highly anticipated speech at the Jackson Hole symposium on Friday. In a slightly less hawkish speech, Powell described a risk management approach to monetary policy and stressed a cautious approach. Powell also noted inflation has become much less responsive to changes in resource utilization, suggesting that persistently low inflation levels may not be as troubling for the Fed as some believe. Further gradual increases of interest rates point to a September hike, now fully priced into market expectations. U.S. housing momentum slows U.S. existing home sales fell to a two-and-a-half year low after slowing 0.7% in July, a fourth-straight decline. Condo sales accounted for most of the downturn, falling 4.8%, while multi-family sales were down a modest 0.2%. New home sales also disappointed with a 1.7% decline, falling to a nine-month low in July. Despite slowing momentum, housing supply remains tight with homes typically staying on the market for 27 days, down from 30 days at this time last year. Canadian retail sales pull back Canadian retail sales slid 0.2% in June, though a pullback was expected after a sizable 2.2% advance in the prior month. Six of eleven categories reported slower growth, with autos and gasoline sales the largest contributors to the decline. Online shopping continues to widely outpace bricks and mortar retailers with e-commerce sales up 18.0% annualized and well ahead of overall retail sales growth of 3.9% annualized. Other economic news The Eurozone Manufacturing PMI index slowed to a 21-month low of 54.6 in July. The U.S. also declined to 54.5 while Japan s manufacturing activity moved 0.2 higher to Japanese inflation rose 0.9% annualized in July, while the core-core index closely watched by the Bank of Japan rose only 0.3%. A decline in cell phone charges and a slowdown in the pace of energy price growth held back price pressures during the month.

2 What s to come Canadian GDP Canadian GDP for the second quarter headlines a quiet week of economic data. Overseas, eurozone inflation for the month of August will be released on Friday. Source: BMO Economics, Reuters, TD Economics as of August 24,

3 Return (CAD, %) Annualized Return (CAD, %) CANADIAN EQUITY INDEXES Close Week YTD 1 YR 3YR 5 YR 10 YR 52 wk high 52 wk low S&P/TSX Composite PR Index 16, ,586 14,786 S&P/TSX Composite TR Index 55, ,066 49,439 Energy TR 3, ,903 3,197 Materials TR 2, ,944 2,539 Industrials TR 4, ,502 3,618 Consumer Disc. TR 3, ,750 3,071 Consumer Staples TR 5, ,175 5,509 Health Care TR Financials TR 5, ,270 4,561 Information Technology T Telecom Serv ices TR 3, ,157 2,798 Utilities TR 4, ,703 4,145 S&P/TSX 60 TR Index 2, ,693 2,346 MSCI Canadian Small Cap PR Index Return (CAD, %) Annualized Return (CAD, %) WORLD EQUITY INDEXES Close Week YTD 1 YR 3YR 5 YR 10 YR 52 wk high 52 wk low CAC 40 PR Index 5, ,657 4,995 DAX 30 PR Index 12, ,597 11,727 DJIA PR Index 25, ,617 21,674 DJIA TR Index 56, ,461 46,431 FTSE 100 PR Index 7, ,904 6,867 FTSE 100 TR Index 6, ,831 5,884 FTSE/Xinhua A200 8, ,660 8,452 Hang Seng PR Index 27, ,484 26,871 Hang Seng TR Index 76, ,476 73,827 MSCI EAFE TR Index 7, ,675 7,561 MSCI Emerging Markets TR 2, ,772 2,268 MSCI Europe TR Index 9, ,736 9,480 MSCI Far East Free (ex-japan) TR 1, ,613 1,343 MSCI World TR Index 8, ,058 7,777 MSCI World AC TR Index 1, , NASDAQ Composite PR 7, ,950 6,229 Nikkei 225 PR 22, ,129 19,240 Russell 2000 TR 8, ,554 6,742 Russell 2000 Growth TR 7, ,739 5,852 Russell 2000 Value TR 12, ,066 10,475 S&P 500 PR Index 2, ,876 2,428 S&P 500 TR Index 5, ,726 4,487 Shanghai Comp PR 2, ,587 2,653 ECO_RELEASE_DT Interest Rates Current Next Meeting Bank of Canada Ov ernight Lending Rate Bank of England Repo Rate European Central Bank Min bid rate at refi tende Federal Funds Target Rate 1.50% 0.75% 0.00% 2.00% 9/5/2018 9/13/2018 9/13/2018 9/26/2018 3

4 Total Ret (%) Historical Prices 52 wk 52 wk Commodities ($US) Close Week YTD 1 YR 3YR 5 YR 10 YR high low Copper Corn Crude Oil Gold 1, ,286 1,155 1, ,366 1,160 Natural Gas Nickel 13, ,702 9,486 14,471 20,845 15,693 10,174 Platinum ,541 1,436 1, Soybeans ,365 1,321 1, Silv er Wheat Zinc 2, ,116 1,702 1,960 1,817 3,606 2,298 CPN MATURITY Bond Yields Coupon Maturity Date Canada 2 Year Treasuries /1/ Year Treasuries /1/ Year Treasuries /1/2048 ECB 2 Year Treasuries /11/ Year Treasuries /15/ Year Treasuries /15/2048 Japan 2 Year Treasuries /1/ Year Treasuries /20/ Year Treasuries /20/2048 US 2 Year Treasuries /31/ Year Treasuries /15/ Year Treasuries /15/2048 Current Price Yield to Maturity Total Ret (%) Historical Prices Currencies Close Week YTD 1 YR 3YR 5 YR 10 YR high low CAD / EURO CAD / USD CAD / UK POUND USD / AUSTRALIAN $ USD / BRAZIL REAL USD / EURO USD / MEXICAN PESO USD / UK POUND USD / YEN Source: Bloomberg, as of August 24,

5 Commentaries contained herein are provided as a general source of information based on information available as of August 24, 2018 and should not be considered as personal investment advice or an offer or solicitation to buy and/or sell securities. Every effort has been made to ensure accuracy in these commentaries at the time of publication; however, accuracy cannot be guaranteed. Market conditions may change and the manager accepts no responsibility for individual investment decisions arising from the use of or reliance on the information contained herein. Published Date: 5