A recap of last week s top economic news and what s to come Annual inflation rate slows in Canada Canadian inflation rose 0.7% in January, though the annualized pace slowed to 1.7%, from 1.9% previously, as a large gain in the same month last year rolled off the headline data. The decline was largely caused by a deceleration in energy prices to a pace of 2.4% annualized after growing 4.5% in December. Food prices rose 2.3% annualized in January, the fastest pace in nearly two years, likely impacted by the minimum wage hike in Ontario as restaurants passed higher prices onto customers. Telephone services also rebounded with the largest monthly price increase since 1981 following aggressive discounting amongst retailers in the prior month. The Bank of Canada s three core inflation measures averaged 1.8% year over year in January, unchanged from December s levels. U.S. existing home sales slip U.S. existing home sales slipped 3.2% in January, missing expectations for a modest gain. Sales volumes also fell below last year s average and to levels last reached in September 2017. The decline was concentrated in single-family home sales, falling 3.8%, whereas condo sales grew 1.6% in January. While activity decelerated across all four regions to below year-ago levels, prices remain strong with an increase of 5.8% on average. Canadian consumers reduce spending Canadian retail sales disappointed with a 0.8% decline in December, though somewhat of a pullback was expected with the growing popularity of Black Friday deals pulling sales into November. Electronics and appliance sales plunged 9.1% in December after reporting the strongest monthly gain on record in the prior month, and general merchandise sales fell 5.3% in December. Overall, fourth quarter sales were strong with 3.8% annualized growth. Retail sales rose 6.7% in 2017, the fastest annual pace in 20 years. Volumes were also strong during the year with 5.4% growth, the largest increase since 2004. Other economic news Eurozone inflation continued its downward trend over the past three months, slowing to 1.3% annualized in January. A reduction in energy prices on a year over year basis caused a deceleration in headline inflation to levels last seen in July 2017. Positively, core inflation rose 1.0% higher from a year ago in January, a slight improvement from 0.9% in December.
The U.K. economy expanded 0.4% in the second estimate of fourth quarter GDP. The slight downward revision reduced calendar year GDP to 1.7% in 2017, the slowest pace of growth amongst all major economies. The U.K. also reported higher unemployment for the first time in nearly two years with the jobless rate ticking up to 4.4% in the fourth quarter, though still remains close to multi-decade lows. What s to come Canadian GDP reported Canada reports December s GDP data next week to close out a year that saw robust growth through the first half of 2017 before slowing in recent months. Manufacturing activity for several regions including the U.S., China and Japan will also be reported throughout the week. Source: BMO Economics, TD Economics, Financial Times, as of February 23, 2018 2
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 15,638 1.2-3.5-0.9 1.0 4.2 1.4 16,421 14,786 S&P/TSX Composite TR Index 52,261 1.2-3.2 2.0 4.0 7.4 4.5 54,682 49,253 Energy TR 3,366 1.5-7.8-10.0-4.0-1.1-0.8 3,811 3,197 Materials TR 2,722 1.5-3.1-5.4 1.1-2.2-3.2 2,944 2,491 Industrials TR 3,987 1.9-0.6 14.9 8.2 14.4 11.1 4,032 3,423 Consumer Disc. TR 3,353 0.7-2.5 13.9 7.4 18.0 10.0 3,484 2,887 Consumer Staples TR 5,744-1.4-5.1 1.1 5.9 17.3 13.6 6,158 5,502 Health Care TR 565 0.6-9.0 11.9-46.2-15.4 3.9 736 374 Financials TR 5,033 1.6-1.7 4.9 10.9 12.6 8.9 5,235 4,455 Information Technology T 312 0.8 10.8 24.9 11.6 21.2-2.0 314 245 Telecom Serv ices TR 2,889 1.4-5.9 4.3 7.1 9.5 9.8 3,157 2,719 Utilities TR 4,276-0.4-7.7-0.6 3.2 4.5 5.1 4,703 4,145 S&P/TSX 60 TR Index 2,505 1.5-3.1 2.6 4.5 8.1 4.5 2,625 2,346 MSCI Canadian Small Cap PR Index 347 0.2-4.5-5.7 0.4 1.3 0.8 370 336 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 5,317 0.5 3.5 22.2 6.1 10.6 1.3 5,567 4,806 DAX 30 PR Index 12,484 0.1 0.0 17.5 7.0 13.5 6.6 13,597 11,722 DJIA PR Index 25,310 1.3 3.5 17.4 12.0 17.5 9.8 26,617 20,380 DJIA TR Index 54,781 1.3 3.8 20.2 14.8 20.4 12.7 57,461 43,213 FTSE 100 PR Index 7,244-0.2-1.5 7.2-1.6 5.3 0.9 7,793 7,073 FTSE 100 TR Index 6,186 0.1-0.9 11.4 2.4 9.4 4.8 6,609 5,864 FTSE/Xinhua A200 10,812 3.8 6.2 28.0 5.6 13.0 1.5 11,660 8,533 Hang Seng PR Index 31,267 1.7 5.5 24.2 7.9 11.0 5.2 33,484 23,439 Hang Seng TR Index 84,573 1.9 5.7 28.8 12.0 15.3 9.0 89,476 61,300 MSCI EAFE TR Index 8,210 0.5 1.7 16.5 6.8 12.5 5.9 8,675 6,740 MSCI Emerging Markets TR 2,652 2.4 6.1 26.6 10.5 10.4 5.6 2,772 1,963 MSCI Europe TR Index 10,111 0.0 1.2 18.0 5.7 12.1 5.5 10,736 8,216 MSCI Far East Free (ex-japan) TR 1,536 2.7 4.9 29.3 11.9 13.6 8.5 1,613 1,125 MSCI World TR Index 8,639 1.1 2.8 14.7 9.5 16.5 9.2 9,058 7,236 MSCI World AC TR Index 1,043 1.3 3.2 16.1 9.6 15.8 8.8 1,093 862 NASDAQ Composite PR 7,337 2.3 7.4 21.4 14.2 23.5 14.8 7,506 5,769 Nikkei 225 PR 21,893 1.3 2.7 15.4 10.0 15.9 7.3 24,129 18,225 Russell 2000 TR 7,631 1.3 2.1 8.7 9.7 17.5 12.3 7,926 6,550 Russell 2000 Growth TR 6,834 1.7 3.9 16.4 9.9 19.0 13.3 7,041 5,573 Russell 2000 Value TR 11,475 0.9 0.1 1.4 9.3 16.0 11.2 12,066 10,294 S&P 500 PR Index 2,747 1.5 3.8 12.2 9.4 17.6 9.7 2,873 2,322 S&P 500 TR Index 5,268 1.6 4.2 14.7 11.8 20.0 12.2 5,347 4,487 Shanghai Comp PR 3,289 3.9 3.2 5.9 0.7 11.6 0.6 3,587 3,017 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 1.25% 0.50% 0.00% 1.50% 3/7/2018 3/22/2018 3/8/2018 3/21/2018 3
Total Ret (%) Historical Prices 52 wk 52 wk Commodities ($US) Close Week YTD 1 YR 3YR 5 YR 10 YR high low Copper 321-1.1-2.7 264 259 353 379 332 247 Corn 366-0.3 4.4 366 379 690 522 395 329 Crude Oil 63.55 3.0 5.2 54.45 49.45 93.13 98.81 66.66 42.05 Gold 1,329-1.4 2.0 1,250 1,202 1,581 945 1,366 1,195 Natural Gas 2.63 2.6-11.1 2.62 2.88 3.29 9.15 3.66 2.52 Nickel 13,731-1.0 8.0 10,538 14,082 16,929 28,250 13,969 8,700 Platinum 997-0.8 7.1 1,010 1,164 1,609 2,166 1,045 873 Soybeans 1,036 1.4 8.9 1,012 999 1,461 1,420 1,063 900 Silv er 16.53-0.7-2.5 18.19 16.33 28.74 18.03 18.66 15.19 Wheat 452-1.2 5.9 438 506 715 1,050 554 387 Zinc 3,518-2.2 5.5 2,789 2,036 2,072 2,487 3,589 2,419 CPN MATURITY Bond Yields Coupon Maturity Date Canada 2 Year Treasuries 1.250 2/1/2020 10 Year Treasuries 1.000 6/1/2027 30 Year Treasuries 2.750 12/1/2048 ECB 2 Year Treasuries 0.000 12/13/2019 10 Year Treasuries 0.500 2/15/2028 30 Year Treasuries 1.250 8/15/2048 Japan 2 Year Treasuries 0.100 2/15/2020 10 Year Treasuries 0.100 12/20/2027 30 Year Treasuries 0.800 12/20/2047 US 2 Year Treasuries 2.000 1/31/2020 10 Year Treasuries 2.750 2/15/2028 30 Year Treasuries 3.000 2/15/2048 Current Price 99.00 89.65 107.65 101.12 98.56 98.59 0.00 0.05 0.75 100.02 98.98 96.98 Yield to Maturity 1.78 2.24 2.40-0.54 0.65 1.31 0.00 0.05 0.75 2.24 2.87 3.16 Total Ret (%) Historical Prices Currencies Close Week YTD 1 YR 3YR 5 YR 10 YR high low CAD / EURO 0.64 0.23-3.03 0.72 0.70 0.74 0.67 0.73 0.64 CAD / USD 0.79-0.67-0.68 0.76 0.80 0.98 0.99 0.83 0.73 CAD / UK POUND 0.57-0.18-4.00 0.61 0.51 0.65 0.50 0.63 0.56 USD / AUSTRALIAN $ 1.28 0.85-0.45 1.30 1.28 0.97 1.08 1.36 1.23 USD / BRAZIL REAL 3.24 0.26-2.23 3.06 2.88 1.97 1.71 3.41 3.04 USD / EURO 0.81 0.91-2.36 0.95 0.88 0.76 0.67 0.95 0.80 USD / MEXICAN PESO 18.55 0.16-5.62 19.67 15.09 12.70 10.77 20.55 17.45 USD / UK POUND 0.72 0.52-3.31 0.80 0.65 0.66 0.51 0.83 0.70 USD / YEN 106.89 0.64-5.10 112.61 118.81 93.42 107.17 115.51 107.32 Source: Bloomberg, as of February 23, 2018 4
Commentaries contained herein are provided as a general source of information based on information available as of February 23, 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