the weekly bottom line - may 13, 2011

The Weekly Bottom Line TD Economicswww.td.com/economics

May 13, 2011

HIGHLIGHTS OF THE WEEK

United States• TheriskofdebtrestructuringinGreeceismounting,whichinturnedspurredStandard&Poor’stodowngradethe

country’screditratingbytwonotches.• Meanwhile,therollercoasterrideofcrudeoilunderscoredthevolatilityinoilmarkets,promptingU.S.stockmarkets

tomirrorthesemovements.• TheeffectsofsurgingoilpriceswereevidentonMarch’stradedata,andApril’sretailsalesandconsumerpricedata• Goingforward,shouldtherecentdropsinthepriceofcrudeoilbesustained,itcouldprovidesomerelieftoconsumer

spendingandthetradebalance.Canada• InflationisexpectedtorecordanothersizeablegainwhendataarereleasednextFriday.Foodandenergyhave

onlybeenmostlyresponsiblefortherecentstrength inconsumerprices.Economicgrowth inCanadahasbeensurprisinglystrongrecentlyandinflationarypressurescomewiththeterritory.

• Also,foodandgaspricesarenotthebe-allandend-alloftheconsumerpriceindex.Therearemanycomponentsrecordingeitherlowornegativeinflationwhichhavebeen,fornow,providingsomeoffset.

• Goingforward,inflationarypressurewillcontinuetobuild,thoughatamodestpaceconsistentwithourforecastformoderateeconomicgrowth.

• TDEconomicscontinuestoexpecttheBankofCanadatoresumehikinginterestratesattheirJulymeeting,bringingtheOvernightRateto2.00%byyear-end.

Current* WeekAgo

52-WeekHigh

52-WeekLow

Stock Market IndexesS&P500 1,344 1,340 1,364 1,023 S&P/TSXComp. 13,402 13,567 14,271 11,093 DAX 7,412 7,492 7,528 5,670 FTSE100 5,951 5,977 6,091 4,806 Nikkei 9,649 9,859 10,858 8,605 Fixed Income YieldsU.S.10-yrTreasury 3.18 3.15 3.74 2.38Canada10-yrBond 3.20 3.19 3.52 2.69Germany10-yrBund 3.09 3.17 3.49 2.12UK10-yrGilt 3.37 3.38 3.88 2.83Japan10-yrBond 1.13 1.15 1.36 0.85Foreign Exchange Cross RatesC$(USDperCAD) 1.04 1.03 1.06 0.93Euro(USDperEUR) 1.42 1.43 1.48 1.19Pound(USDperGBP) 1.62 1.64 1.67 1.43Yen(JPYperUSD) 80.6 80.6 92.8 78.9Commodity Spot Prices**CrudeOil($US/bbl) 99.5 97.2 113.9 66.0NaturalGas($US/MMBtu) 4.09 4.24 5.17 3.18Copper($US/met.tonne) 8712.0 8808.0 10179.5 6067.8Gold($US/troyoz.) 1503.9 1495.6 1563.7 1161.6

THIS WEEK IN THE MARKETS

*asof10:00amonFriday,**Oil-WTI,Cushing,Nat.Gas-HenryHub,LA(Thursdaycloseprice),Copper-LMEGradeA,Gold-LondonGoldBullion;Source:Bloomberg

FederalReserve(FedFundsRate)BankofCanada(OvernightRate)EuropeanCentralBank(RefiRate)BankofEngland(RepoRate)BankofJapan(OvernightRate)Source:CentralBanks,HaverAnalytics

0.00%0.50%

0-0.25%1.00%1.25%

GLOBAL OFFICIAL POLICY RATE TARGETSCurrentTarget

ANNUAL INFLATION RATES

-2

-1

0

1

2

3

4

5

6

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011-2

-1

0

1

2

3

4

5

6

U.S. Canada

Consumerpriceindex,Y/Y%chg.

Source:BureauofLaborStatistics,StatisticsCanada

The Weekly Bottom LineMay 13, 2011

TDEconomicswww.td.com/economics

2

UNITED STATES - THE POWER OF OIL PRICES

It was a very busy week with data coming from all fronts. The week started with Standard & Poor’s cutting Greece’s credit rating by two notches from BB- to B, and Moody’s and Fitch issuing warnings of possible downgrades, as the risk of debt restructuring is mounting. The renewed worries about Europe’s debt issues pushed some momentum back towards the U.S. dollar, which increased by 1% against the Euro as of mid-day Friday. Meanwhile, the roller coaster ride of crude oil and gasoline future prices – persisted.

Oil prices skyrocketed in recent months and that poses a major downside risk to the U.S. economic outlook. As a simple rule of thumb, for every 20% increase in the price of oil, U.S. economic growth is slowed by roughly 0.4 percentage points. The effects of surging oil prices were evident on March’s trade data, and April’s retail sales and consumer price data released this week. In March, the U.S. trade deficit widened by $2.8 billion to $48.2 billion. Led by a 14.1% rise in crude oil imports and a $13 jump in oil prices per barrel, overall imports rose by 4.9% in March. On the flip side, a solid 4.6% improvement in exports – their highest pace of growth in 17 years – was due to an increase in volumes and not prices. Stronger foreign demand for U.S. products coupled with a 1.0% drop in the trade weighted U.S. dollar in March lifted exports, which finally surpassed their pre-recession peak and reached a new record of $172.2 billion. Unfortunately, surging oil prices stole the spotlight. Given that the price of oil increased by another $7 per barrel in April, petroleum products will continue to weigh on the trade deficit, before the effects taper in May if the recent decline in oil prices is sustained. Oil prices tumbled by 13.1% so far in May.

The effects of high energy prices were also apparent in

the retail sales report. Fueled by a 2.7% increase in gasoline sales, retail sales increased by 0.5% in April. However, core retail spending, which excludes both auto and gasoline sales recorded the smallest monthly gain since December 2010. The soft reading in core retail sales suggests that the higher pump prices are biting into consumer’s purchasing power. But, the unwinding of some of the strength in pump prices and sustained improvements in the labor market should keep real consumer spending running at roughly 3% this year.

The final and most anticipated piece of economic news came from the Consumer Price Index (CPI) report, which revealed that oil prices continue to drive a wedge between headline and core inflation. Led by strong gains in energy prices, the annual headline inflation rate rose to 3.1% in April from 2.7% in March. However, there is limited evidence of pass through of higher energy prices to core prices. Annual core inflation inched up to only 1.3% in April from 1.2% in March. But, the trough in inflation is definitely in the rear-view mirror. As the economy and job market continue to expand, the Fed will need to start tightening monetary policy in early 2012, and possible sooner if the Fed becomes worried about inflation expectations becoming unanchored.

All told, higher oil prices pose a risk to the economic outlook. But, the recent drop is a positive development, supporting the notion that the run up was a transitory phe-nomenon. While gas prices still remain above $4 a gallon in roughly half of the states, they should eventually follow the declines in crude oil. The timing though is contingent on how fast refineries replenish their supplies with cheaper crude oil.

Christos Shiamptanis, Economist 416-982-2556

CRUDE OIL - WEST TEXAS INTERMEDIATE

80

85

90

95

100

105

110

115

Jan-2011 Feb-2011 Mar-2011 Apr-2011

Source:HaverAnalytics,TDEconomics

US$perbarrel

RETAIL SALES

-1.0

-0.5

0.0

0.5

1.0

1.5

Jan Apr Jul Oct Jan Apr

headlineretailsalescoreretailsales*

M/M%chg.

*ExcludingautoandgasolinesalesSource:CensusBureau

20112010



3

CANADA – WHAT TO EXPECT WHEN YOU’RE EXPECTING (INFLATION TO RISE)

With prices at the pump and grocery store checkouts eating away at pocketbooks over the past few months, Canadians don’t need to be told that inflation is on the rise. And it should come as no surprise that markets are expecting another sizeable gain in the consumer price index when data are released next Friday. However, we felt it important to elucidate a few salient points surrounding the inflation data and what it implies for the average Canadian household.

First, rising price pressures are not entirely being driven by food and energy prices, though those are currently the primary contributors. Fundamentally, economic growth in Canada has been surprisingly strong and inflationary pres-sures come with the territory. Real GDP data for the fourth quarter of 2010 came in above consensus expectations and the first quarter of 2011 looks set to surprise on the upside as well. Our tracking indicates that the economy will ex-pand at close to a 5% annualized rate in the first quarter of the year, above the Bank of Canada’s expectation of 4.2% growth. TD Economics has maintained that a shift away from personal spending towards business investment and, more notably, exports would characterize the economic recovery in 2011. We are seeing this in spades. Canadian exporters have continued to shrug off a Loonie that has been at above parity for almost four consecutive months now. Instead, stronger-than-expected growth in the U.S. is the dominating factor and international trade data released earlier this week indicated that Canadian exports grew by 3.5% in March. This rounded out the quarter with an im-pressive $2.4 billion surplus for the first quarter with the U.S. being the primary destination. Indeed, this will be the primary driver of real GDP growth when data are released

two weeks from now. Such robust growth implies that idle capacity is being absorbed quickly, jobs are being created, incomes are growing, and thus prices are being pushed up as firms regain pricing power.

This brings us to our second point. Food and energy are not the be-all and end-all components of the consumer price index – they are simply the most visible to households. Food and energy comprise roughly 20% of the total index. And it is important to realize that while gas prices are high and food prices are expected to rise higher than they currently stand, there are other components that are, for now, providing an offset. To name a few, lower interest rates have led to outright declines in mortgage interest costs, clothing prices have been on a continuous decline since 2000, and auto prices are still quite far from their pre-recession level. In March’s inflation report, the share of components that recorded negative or low inflation (1% or lower) was roughly equivalent to the components that had high inflation (>3%) (see chart).

But what can we expect in the next few months on the price front? TD Economics forecasts underlying inflation-ary pressures to continue building modestly, in line with our projection for moderate GDP growth in the quarters ahead. Food inflation will become a bigger driver of overall infla-tion owing to last year’s rise in global food prices that has yet to fully feed into Canadian food prices. However, it is our belief that gas prices have probably peaked, and that the high Canadian dollar will help to keep underlying inflation-ary pressures in check. Moderate core inflation will provide the central bank with wiggle room as it begins to gradually tighten the monetary reins this summer.

Francis Fong, Economist 416-982-8066

CANADIAN CONSUMER PRICE INDEX

-40

-30

-20

-10

0

10

20

30

40

2009 2010 2011-4

-3

-2

-1

0

1

2

3

4Y/Y%Change Y/Y%Change

All-ItemsCPI(rightscale)GasolineComponent (leftscale)

Source:StatisticsCanada

CANADIAN HEADLINE INFLATION BYCOMPONENT

-15

-10

-5

0

5

10

15

20

25

30

35

-1 0 1 2 3 4 5 6 7 8 9

HighInflation(>3%)ComponentsTotalWeight:40.01%

LowInflation(1%orless)ComponentsTotalWeight:42.82%

2%Target

Gasoline

WeightinConsumerPriceIndex(%)

InflationRate(%

)Source:StatisticsCanada



4

U.S.: UPCOMING KEY ECONOMIC RELEASES

*ForecastbyRatesandFXStrategyGroup.Forfurtherinformation,contactTDRates&[email protected].

The housing sector remains on the ropes, weighed down by weak sales and falling prices as the huge glut of unsold homes which continues to temper prices. While the ongoing economic recovery and sustained improvement in labour market activity should provide a favourable backdrop for housing market activity, prospective homebuyers are con-tinuing to sit on the sidelines in hopes of more attractive prices. For now, we expect the pace of sales to stabilise around the 4.75 million to 5.25 million units range, with little intrinsic upside momentum. In April, sales are likely to rise marginally to 5.15 million units, up 1.0% M/M from the 5.1 million units sold in March. Both single-family and multi-family units are expected to rise during the month, with sales of distressed properties continuing to account for one-third of total sales. Cash purchases should also make-up a significant portion of the total sale as invest-

ment buyers remain active in the market, taking advantage of the bargains to be had. In the coming months, we expect the pace of existing home sales to remain at very depressed levels in the coming months as fear of further price declines tempers demand.

U.S. Existing Home Sales - April* Release Date: May 19, 2011March Result: 5.10MTD Forecast: 5.15MConsensus: 5.20M

U.S. EXISTING HOME SALES*

2,000

3,000

4,000

5,000

6,000

7,000

8,000

Feb-10 Apr-10 Jun-10 Aug-10 Oct-10 Dec-10 Feb-11

Thousandsofunits

*SeasonallyadjustedatannualratesSource:CensusBureau/HaverAnalytics

mailto:TDRates&[email protected]



5

CANADA: UPCOMING KEY ECONOMIC RELEASES


Following a soft report in February, manufacturing ship-ments are forecast to close the quarter on a positive note, rebounding by 2.0% M/M in March. This bounce is expected to be primarily driven off of the boost in exports in the re-cently released international merchandise trade report and strong US demand. While imports from Japan did take a hit in March, the offset is that imports from the US, particularly auto parts, played a major role in countering that decline. In that sense, the story for the manufacturing sector for March and heading forward will be one of satisfying demand with limited supply. Indeed, the latter is expected to play a bigger role in the second quarter of this year where some auto plants in Canada have experienced reduced output and shutdowns in response to the adverse impact on the supply chain. This is especially the case when we take into consideration that inventories of transport equipment have moved lower in recent months and it will only be a matter of time before this begins to feed into manufacturing sales in the second quarter of this year. However, for March, when we adjust for inflation, real shipments is expected to enjoy a modest

uptick on the month of 0.7% M/M. Pulling this altogether indicates that annualized Q1 real GDP is shaping up to be quite strong and could print well above 4.0%, posing a slight upside risk to our own and the Bank of Canada’s forecast for the quarter. Finally, this is also consistent with the notion of diminishing spare capacity in the Canadian economy and with our long-standing call that the Bank will begin to lift the key policy rate higher starting in July.

Canadian Manufacturing Shipments - March*Release Date: May 16, 2011February Result: -1.5% M/M TD Forecast: 2.0% M/M; Consensus: 1.7% M/M

Canadian retail sales are expected to have risen by a solid 1.5% in March, which marks the first back-to-back monthly gain since November of last year. This gain is based both on an advance in auto sales and a sharp increase in prices at the pump. Indeed, excluding autos reveals a still-solid 1.2% gain, though when the impact of changing prices—most notably gasoline—is controlled for, real retail sales are forecast to rise by a far more temperate 0.5%.

When combining this forecast with an equally positive expectation for manufacturing shipments and wholesale trade, we are looking at an upbeat industry-level advance in real GDP growth. Keep in mind, however, this release will be trumped by the expenditure-based quarterly release that is currently tracking north of the Bank of Canada’s 4.2%

forecast outlined in the March Monetary Policy Report. An important component of this advance will be continued momentum in consumer spending reflected in the forecasted gain in retail sales in March.

Canadian Retail Sales - March*Release Date: May 20, 2011February Result: total 0.4% M/M; ex-autos 0.7% M/MTD Forecast: total 1.5% M/M ; ex-autos 1.2% M/M Consensus: total 0.8% M/M ; ex-autos 0.7% M/M

CANADIAN MANUFACTURING SHIPMENTS

-2.0

-1.0

0.0

1.0

2.0

3.0

4.0

5.0

Feb-10 Apr-10 Jun-10 Aug-10 Oct-10 Dec-10 Feb-111.2

1.3

1.4

1.5

Source:StatisticsCanada

M/M%Chg. SeasonallyAdjustedRatio

ManufacturingShipments(leftscale)

Inventory-to-ShipmentsRatio(rightscale)

CANADIAN RETAIL SALES*

-2.5

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

Feb-10 Apr-10 Jun-10 Aug-10 Oct-10 Dec-10 Feb-11

TotalExMotorVehicles

*SeasonallyAdjustedSource:StatisticsCanada/HaverAnalytics

M/M%Chg.




6

Following the sharp increase in both headline and core prices in March, the CPI report for April will take on an added level of significance. But looking further back in time and recognizing that CPI in February was unusually weak, the two month trend in headline and core prices is running at a far more benign 0.4% and 0.2% respectively. However, there are still forces that will keep inflation elevated in April. Of note is a further increase in commodity prices, which should help to push the non-seasonally adjusted price index higher by 0.5%. After controlling for seasonal variations, the forecasted increase of 0.3% is not as alarming. When compared to last year, headline CPI inflation is expected to continue to move higher, hitting 3.5% in April.

Shifting to core inflation, we are forecasting a relatively benign 0.2% in both the seasonally adjusted and non-ad-justed price index. We would acknowledge an upside risk to this number following news that several large grocery chains raised a wide range of prices by 5% for core food items (recall that only fresh fruits and vegetables are ex-cluded from the Bank of Canada’s core index). Year-ago core inflation will come in at 1.6%.

Should our forecast for core inflation be realized, core inflation will need to be quite benign over the next two months to match the Bank’s forecast for a quarterly rate of 1.4%. The prospect of an upside surprise to the core infla-tion outlook combined with our tracking suggesting that economic growth in Q1 will be faster than what the Bank had previously forecast underpins our long-standing forecast that the next hike will occur in July and that the overnight rate will be increased to an even 2.00% by the end of the year.

Canadian CPI - April*Release Date: May 20, 2011March Result: core 0.7% M/M; all-items 1.1% M/MTD Forecast: core 0.2% M/M; all-items 0.6% M/MConsensus: core 0.2% M/M; all-items 0.5% M/M


CANADIAN CONSUMER PRICE INDEX (CPI)

0.5

1.0

1.5

2.0

2.5

3.0

3.5

Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11

Source:StatisticsCanada/HaverAnalytics

CPI:AllItems

BankofCanadacoreCPIexcepteightmostvolatileitemsandindirecttaxes

Y/Y%Chg.




7

RECENT KEY ECONOMIC INDICATORS: MAY 9-13, 2011

May 10 NFIBSmallBusinessOptimism Apr Index 91.2 91.9May 10 ImportPriceIndex Apr M/M%Chg. 2.2 2.6 RMay 10 IDP/TIPPEconomicOptimism May Index 42.8 40.8May 10 WholesaleInventories Mar M/M%Chg. 1.1 1.0May 11 MBAMortgageApplications 6-May W/W%Chg. 8.2 4.0May 11 TradeBalance Mar USD,Blns -48.2 -45.4 RMay 11 JOLTsJobOpenings Mar Thousands 3124 3025 RMay 11 MonthlyBudgetStatement Apr USD,Blns -40.5 -82.7May 12 InitialJoblessClaims 7-May Thousands 434 474May 12 ContinuingClaims 30-Apr Thousands 3756 3733May 12 ProducerPriceIndex Apr M/M%Chg. 0.8 0.7May 12 PPIExFood&Energy Apr M/M%Chg. 0.3 0.3May 12 AdvanceRetailSales Apr M/M%Chg. 0.5 0.4May 12 RetailSalesLessAutos Apr M/M%Chg. 0.6 0.8May 12 RetailSalesExAutos&Gas Apr M/M%Chg. 0.2 0.6May 12 BusinessInventories Mar M/M%Chg. 1.0 0.5May 13 ConsumerPriceIndex Apr M/M%Chg. 0.4 0.5May 13 CPIExFood&Energy Apr M/M%Chg. 0.2 0.1May 13 U.ofMichiganConfidence May Index 72.4 69.8

May 9 HousingStarts Apr Thousands 179.0 184.7 RMay 9 Int'lMerchandiseTrade Mar CAD,Blns 0.6 0.4 RMay 12 NewHousingPriceIndex Mar M/M%Chg. 0.0 0.4

May9 UK HalifaxHousePrices3Mths/Year Apr Y/Y%Chg. -3.7 -2.9May9 GE TradeBalance Mar EUR,Blns 18.9 11.9 RMay9 FR BankofFranceBus.Sentiment Apr Index 107 110May11 UK TotalTradeBalance Mar GBP,Mlns -3005 -2655 RMay11 JN AdjustedCurrentAccountTotal Mar Yen,Blns 752.7 1209.8May11 AU UnemploymentRate Apr % 4.9 4.9May12 FR CPI-EUHarmonised Apr Y/Y%Chg. 2.2 2.2May12 EC Euro-ZoneInd.Prod. Mar Y/Y%Chg. 5.3 7.3May12 UK NIESRGDPEstimate Apr M/M%Chg. 0.3 0.7May13 EC Euro-ZoneGDP 1Q Y/Y%Chg. 2.5 2.0

Source:Bloomberg,TDEconomics

International

Prior

Canada

United States

ReleaseDate Economic Indicators Data for

Period Units Current



8

UPCOMING ECONOMIC RELEASES AND EVENTS: MAY 16-20, 2011Release

Date Time* Economic Indicator/Event Data for Period Units Consensus

Forecast Last Period

United StatesMay 15 15:45 Fed's Lockhart Speaks on U.S. Economic Outlook in Atlanta16-20 MAY MortgageDelinquencies 1Q Q/Q%Chg. -- 8.2216-20 MAY MBAMortgageForeclosures 1Q Q/Q%Chg. -- 4.63

May 16 08:30 EmpireManufacturing May Index 20.0 21.7May 16 09:00 TotalNetTICFlows Mar USD,Blns -- 97.7May 16 09:00 NetLong-termTICFlows Mar USD,Blns -- 26.9May 16 09:00 Bernanke Speaks on Intangible Assets in WashingtonMay 16 10:00 NAHBHousingMarketIndex May Index 17.0 16.0May 17 08:30 HousingStarts Apr M/M%Chg. 3.8 7.2May 17 08:30 BuildingPermits Apr M/M%Chg. 0.9 11.2May 17 09:15 IndustrialProduction Apr M/M%Chg. 0.4 0.8May 17 09:15 CapacityUtilization Apr % 77.6 77.4May 18 07:00 MBAMortgageApplications 13-May W/W%Chg. -- 8.2May 18 14:00 Minutes of FOMC MeetingMay 18 19:00 Fed's Bullard Speaks in New YorkMay 19 00:00 Fed's Dudley to Speak in Middletown, New YorkMay 19 08:30 InitialJoblessClaims 14-May Thous. 420 434May 19 08:30 ContinuingClaims 7-May Thous. -- 3756May 19 09:45 BloombergEconomicExpectations May Index -- -16.0May 19 09:45 BloombergConsumerComfort 15-May Index -- -46.9May 19 10:00 ExistingHomeSales Apr Mlns 5.20 5.10May 19 10:00 LeadingIndicators Apr M/M%Chg. 0.1 0.4May 19 10:00 PhiladelphiaFed. May Index 20.0 18.5May 19 13:40 Fed's Evans Speaks at Forum in ChicagoMay 20 TBA Fed's Dudley to Speak in Fishkill, New York

CanadaMay16 8:30 ManufacturingSales Mar M/M%Chg. 1.7 -1.5May16 13:00 BoC's Carney speaks on "Canada in a Multi-Polar World"May17 8:30 Int'lSecuritiesTransactions Mar CAD,Blns -- 2.50May18 8:30 LeadingIndicators Apr M/M%Chg. 0.5 0.8May18 8:30 WholesaleSales Mar M/M%Chg. 1.5 -0.6May19 10:45 BoC's Carney participates in a panel discussion in WashingtonMay19 16:15 Boc Dep. Gov. Lane speaks to the Pension & Benefits InstituteMay20 7:00 ConsumerPriceIndex Apr M/M%Chg. 0.5 1.1May20 7:00 BankCanadaCPICore Apr M/M%Chg. 0.2 0.7May20 7:00 BankCanadaCPICore Apr Y/Y%Chg. 1.6 1.7May20 8:30 RetailSales Mar M/M%Chg. 0.8 0.4May20 8:30 RetailSalesLessAutos Mar M/M%Chg. 0.7 0.7

InternationalMay16 1:00 JN ConsumerConfidence Apr Index 36.7 38.6May16 5:00 EC Euro-ZoneCPI-Core Apr Y/Y%Chg. -- 1.3May17 4:30 UK CPI Apr Y/Y%Chg. 4.1 4.0May17 5:00 GE ZewSurvey(CurrentSituation) May M/M%Chg. 87.5 87.1May17 20:30 AU WestpacConsumerConfidences.a. May M/M%Chg. -- 1.2May18 4:30 UK JoblessClaimsChange Apr Thous. 0.0 0.7May18 19:50 JN GDPAnnualized 1QP -2.0 -1.3May18 21:00 NZ ANZConsumerConfidenceIndex May M/M%Chg. -- 0.0May19 4:30 UK RetailSalesw/AutoFuel Apr Y/Y%Chg. 2.5 1.3May20 JN BOJTargetRate 20-May % -- 0.1

*EasternStandardTime;Source:Bloomberg,TDEconomics



9

Thisreport isprovidedbyTDEconomics forcustomersofTDBankGroup.Itisforinformationpurposesonlyandmaynotbeappropriateforotherpurposes.ThereportdoesnotprovidematerialinformationaboutthebusinessandaffairsofTDBankGroupandthemembersofTDEconomicsarenotspokespersonsforTDBankGroupwithrespecttoitsbusinessandaffairs.Theinformationcontainedinthisreporthasbeendrawnfromsourcesbelievedtobereliable,butisnotguaranteedtobeaccurateorcomplete.Thereportcontainseconomicanalysisandviews,includingaboutfutureeconomicandfinancialmarketsperformance.Thesearebasedoncertainassumptionsandotherfactors,andaresubjecttoinherentrisksanduncertainties.Theactualoutcomemaybemateriallydifferent.TheToronto-DominionBankanditsaffiliatesandrelatedentitiesthatcompriseTDBankGrouparenotliableforanyerrorsoromissionsintheinformation,analysisorviewscontainedinthisreport,orforanylossordamagesuffered.

CONTACTS AT TD ECONOMICS

Craig AlexanderSenior Vice President and

Chief Economist mailto:[email protected]

TO REACH US Mailing Address 55KingStreetWest 21stFloor,TDTower Toronto,Ontario M5K1A2 Fax:(416)944-5536 mailto:[email protected]

CANADIAN ECONOMIC ANALYSISDerek Burleton, Vice President and Deputy Chief Economist mailto:[email protected] Pascal Gauthier Senior Economist mailto:[email protected]

Diana Petramala Economist, Macro mailto:[email protected]

Francis Fong Economist, Special Studies mailto:[email protected]

Dina Cover Economist, Industry mailto:[email protected]

Shahrzad Mobasher Fard Economist, Industry mailto:[email protected]

Sonya Gulati Economist, Regional and Government Finances mailto:[email protected]

Leslie Preston Economic Analyst mailto:[email protected]

U.S. & INTERNATIONAL ECONOMIC ANALYSISBeata Caranci, Associate Vice President and Deputy Chief Economist mailto:[email protected] James Marple Senior Economist mailto:[email protected]

Martin Schwerdtfeger Economist, International mailto:[email protected]

Christos Shiamptanis Economist mailto:[email protected]

Alistair Bentley Economist mailto:[email protected]

Chris Jones Economic Analyst mailto:[email protected]

the weekly bottom line - may 13, 2011

Documents

busy week

power of oil pricesit

andapri goingforward

comeconomics2united

s weekly

gasoline future prices

europes debt issues

commodity spot prices