April 16, 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 U.S. inflation inches higher U.S. inflation fell 0.1% in March as gasoline prices declined 4.9%. On an annualized basis, however, inflation rose to 2.4%, the highest level in over a year, as last year s sharp drop in cell phone contract prices rolled off of the year-on-year calculation. Core inflation also rose 0.2% to bring the annualized rate to 2.1%. The U.S. Federal Reserve s (Fed) preferred measure of price pressures, core personal comsumption expenditures (PCE), has yet to reach the central bank s 2% target, though it appears inflation is trending higher and is supportive of continued rate hikes. Canadian housing takes a pause Canadian housing starts edged lower in March after decelerating 2.5% from the prior month, though remains elevated with the 12-month average slightly below the strongest pace since Single-detached starts picked up with 8% growth in March but were more than offset by a 7% decline in urban multi-family starts, which reverted after spiking in the prior month. Multi-unit activity continues to outpace single-detached starts by around two-to-one. Ontario experienced most of March s pull-back, though in context, a correction was expected after the province recorded its third-highest number of starts in a quarter-century last month. Outside of Ontario starts in most other provinces were positive in March, led by British Columbia, Newfoundland and Alberta. Fed minutes supportive of further tightening Minutes from the Fed s March meeting revealed an upbeat tone, with the committee expecting the economy will grow at a solid rate with the help of government spending and tax cuts. While tax cuts are clearly a net-positive for growth, the Fed did acknowledge some downside risk in the event not all cuts are made permanent in future years. A strong majority also believe trade issues pose a clear downside risk for the economy, conceding some concern on the topic, which was largely downplayed in the Fed s initial comments accompanying the March hike. Overall, the Fed appears comfortable with quarterly rate hikes over the near-term. Other economic news Eurozone industrial production unexpectedly declined for a third-straight month in February, falling 0.8%, as activity in Germany and Italy slowed. On an annualized basis, production has risen 2.9%, though much lower than the prior two month s levels, adding to concern that momentum may be slowing in the region.

2 Chinese factory inflation, as measured by PPI, recorded a fifth-consecutive decline to a 17-month low of 3.1% annualized in March. The consumer price index, or CPI, also missed expectations at 2.1% annualized, suggesting a slowdown in the world s second-largest economy. What s to come Bank of Canada meets The Bank of Canada is widely expected to leave rates unchanged at their April meeting, ahead of inflation and retail sales data released on Friday. Chinese GDP and industrial production are set to be reported on Monday, while in the U.S., housing data will be reported on Tuesday. Source: BMO Economics, TD Economics, Strategas Research, as of April 13,

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 15, ,421 14,786 S&P/TSX Composite TR Index 51, ,682 49,253 Energy TR 3, ,772 3,197 Materials TR 2, ,944 2,491 Industrials TR 3, ,048 3,522 Consumer Disc. TR 3, ,484 2,995 Consumer Staples TR 5, ,158 5,524 Health Care TR Financials TR 4, ,235 4,455 Information Technology T Telecom Serv ices TR 2, ,157 2,802 Utilities TR 4, ,703 4,145 S&P/TSX 60 TR Index 2, ,625 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, ,567 4,980 DAX 30 PR Index 12, ,597 11,727 DJIA PR Index 24, ,617 20,380 DJIA TR Index 52, ,461 43,213 FTSE 100 PR Index 7, ,793 6,867 FTSE 100 TR Index 6, ,609 5,864 FTSE/Xinhua A200 10, ,660 8,533 Hang Seng PR Index 30, ,484 23,724 Hang Seng TR Index 83, ,476 62,204 MSCI EAFE TR Index 8, ,675 6,894 MSCI Emerging Markets TR 2, ,772 2,031 MSCI Europe TR Index 10, ,736 8,485 MSCI Far East Free (ex-japan) TR 1, ,613 1,159 MSCI World TR Index 8, ,058 7,264 MSCI World AC TR Index 1, , NASDAQ Composite PR 7, ,637 5,805 Nikkei 225 PR 21, ,129 18,225 Russell 2000 TR 7, ,926 6,555 Russell 2000 Growth TR 6, ,141 5,573 Russell 2000 Value TR 11, ,066 10,294 S&P 500 PR Index 2, ,873 2,329 S&P 500 TR Index 5, ,461 4,487 Shanghai Comp PR 3, ,587 3,017 ECO_RELEASE_DT Interest Rates 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 Current 1.25% 0.50% 0.00% 1.75% Next Meeting 4/18/2018 5/10/2018 4/26/2018 5/2/2018 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, ,288 1,199 1, ,366 1,205 Natural Gas Nickel 13, ,695 12,357 15,784 28,310 14,025 8,700 Platinum ,153 1,487 2,009 1, Soybeans 1, ,413 1,333 1, Silv er Wheat Zinc 3, ,611 2,200 1,840 2,284 3,606 2,419 CPN MATURITY Bond Yields Coupon Maturity Date Canada 2 Year Treasuries /1/ Year Treasuries /1/ Year Treasuries /1/2048 ECB 2 Year Treasuries /13/ Year Treasuries /15/ Year Treasuries /15/2048 Japan 2 Year Treasuries /15/ 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 April 13,

5 Commentaries contained herein are provided as a general source of information based on information available as of April 13, 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