The Week Ahead June 8-12, 2015 Canadian Bonds: What Happened Last Time? by Avery Shenfeld Economics Avery Shenfeld (416) 594-7356 [email protected] Benjamin Tal (416) 956-3698 [email protected] Andrew Grantham (416) 956-3219 [email protected] Royce Mendes (416) 594-7354 [email protected] Nick Exarhos (416) 956-6527 [email protected] “Canadian 10-year rates fell from mid2003 to Q2 2005 even as Treasury yields headed higher...” http://research. cibcwm.com/res/Eco/ EcoResearch.html If past is prologue, our bearish stance on Canadian long bonds might be a bit too harsh, at least for the next few quarters. Put Canadian and US 10-year rates on a longer-term chart, and they look like twins. If you had an advance peek at where longer Treasuries were headed, you would almost invariably get the call on Canadian rates right. But there was one notable exception to the rule, and although it was just over a decade ago, it might be somewhat instructive for what lies ahead. The bursting of the tech bubble led the US into recession in 2001, and monetary easing saw the Fed still cutting the funds rate into early 2003. In contrast, a smaller tech sector meant that the hit to the Canadian economy was much milder, and after easing policy rates through 2001, the Bank of Canada tightened ahead of the Fed in 2002 to early 2003, opening up a gap in short rates. If that has a familiar ring to it, it’s because it’s an exact parallel to Canada’s milder recession in 2008, and the BoC’s decision to hike rates while the Fed was still easing in 2010. The next chapter also echoes across the decade. Come 2003, disappointments in Canadian growth had the BoC cutting rates in 2003-04, shrinking the positive spread to fed funds. Fed hikes in 2004 as the US economy rebounded closed the gap in short rates vs Canada by February 2005. With soft oil prices being more of a dent to Canada’s economy, we similarly expect the next year and a half to see Fed hikes eliminate the gap to overnight rates in Canada. Divergent developments at the front end were enough to see a rare departure from the normal near-perfect linkage in the direction of bond yields. Canadian 10-year rates fell from mid-2003 to Q2 2005 even as Treasury yields headed higher (Chart). Will history repeat itself in the coming few quarters if the Fed tightens while the BoC stands pat? That’s less likely for two key reasons. First, unlike what lies ahead, the Fed wasn’t just nudging rates higher after mid-2004, but hiking by about 3% in the space of a year. And second, Canadian 10year rates started the historical example at roughly 1% above comparable Treasuries, rather than the -57 bp spread we’ve already built in. As a result, if Treasuries still face a sell-off on better US growth and a Fed tightening before year end, an outright rally will be a much tougher row to hoe for Canadian 10-year bonds. Still, spreads could get much more negative than they are already, perhaps even more than the -75 bps we’ve projected. At a minimum, it’s going to be safer to put long duration positions on in Canada rather than in the US dollar market if, as we expect, US GDP figures come into better line with the healthy American jobs figures we’re still racking up. 7.0 % Canada-US 10-Year Yields 6.5 6.0 5.5 divergence 5.0 4.5 4.0 3.5 3.0 2.5 2.0 Oct-99 Canada Jun-01 Feb-03 US Oct-04 Jun-06 CIBC World Markets Inc. • PO Box 500, 161 Bay Street, Brookfield Place, Toronto, Canada M5J 2S8 • Bloomberg @ CIBC • (416) 594-7000 C I B C W o r l d M a r k e t s C o r p • 3 0 0 M a d i s o n A v e n u e , N e w Yo r k , N Y 1 0 0 1 7 • ( 2 1 2 ) 8 5 6 - 4 0 0 0 , ( 8 0 0 ) 9 9 9 - 6 7 2 6 Friday June 12 Thursday June 11 Wednesday June 10 Tuesday June 9 Monday June 8 ` (Apr) (M) 8:30 AM BUILDING PERMITS M/M -5.0% 196K CIBC H, M, L = High, Medium or Low Significance (H) (M) (M) (M) (M) (L) (H) (H) (H) (L) (L) (L) (L) (L) (L) (L) Consensus Source: Bloomberg (Jun P) 10:00 AM MICHIGAN CONSUMER SENTIMENT SAAR = Seasonally Adjusted Annual Rate (May) (May) (May) (May) (Apr) 10:00 AM BUSINESS INVENTORIES M/M 8:30 AM PPI M/M PPI M/M (core) PPI Y/Y PPI Y/Y (core) (May) (May) (May) (May) 8:30 AM RETAIL SALES M/M RETAIL SALES (X-AUTOS) M/M RETAIL SALES CONTROL GROUP M/M IMPORT PRICE INDEX M/M (May 30) (Jun 6) (Apr) 10:00 AM BUSINESS INVENTORIES M/M 8:30 AM CONTINUING CLAIMS INITIAL CLAIMS (Jun 5) (May) 2:00 PM TREASURY BUDGET 7:00 AM MBA-APPLICATIONS 83.6% 0.0% (Apr) 10:00 AM WHOLESALE INVENTORIES M/M AUCTION: 4-WEEK BILLS $35B (prev) AUCTION: 3-YR TREASURIES $24 AUCTION: 3-M BILLS $24B, 6-M BILLS $24B UNITED STATES 8:30 AM CAPACITY UTILIZATION NEW HOUSING PRICES M/M (Q1) (L) (Apr) (L) 11.6% 183K Prior AUCTION: 10-YR TREASURIES $24B (prev) 187K Consensus AUCTION: 2-YR CANADAS $xxB Speaker: 4:15 PM Carolyn Wilkins (Sr. Deputy Gov.) CASH MANAGEMENT BUYBACK (Jun'16 - Sep'16) - $0.5B (May) (M) 8:15 AM HOUSING STARTS SAAR CANADA 0.5% 0.2% -1.1% 0.7% 1.5% 0.9% 0.6% CIBC 91.2 0.4% 0.1% -1.1% 0.7% 0.2% 1.1% 0.7% 0.5% 1.0% 0.2% -$97.5B 0.2% Consensus 90.7 -0.4% -0.2% -1.3% 0.8% 0.1% 0.0% 0.1% 0.0% -0.3% 2196K 276K 0.1% -7.6% $156.7B 0.1% Prior Week Ahead Calendar And Forecast CIBC World Markets Inc. The Week Ahead—June 8-12, 2015 Week Ahead’s Market Call by Avery Shenfeld In the US, we’re looking for a barnburner retail sales report for May, or the equivalent in a revision to April, to give the demand side of the economy something more in line with the booming jobs trend. Auto sales will help, but if Americans were buying big ticket durables like vehicles, perhaps they were also unleashing some of their spending power elsewhere. The rest of the week is light on market-moving news, although the Greek situation will continue to play out. In Canada, housing starts could nudge up to the higher end of their recent range, but permits could head the other way, with the two results thereby cancelling out in terms of their market implications. BoC Deputy Governor Wilkins will be the first Canadian central banker to speak after the mixed news of weakness in Q1 GDP and April trade, but strength in May hiring. 3 CIBC World Markets Inc. The Week Ahead—June 8-12, 2015 Week Ahead’s Key Canadian Number: 215 Housing Starts—May Housing Starts 000s (Monday, 8:15 a.m.) 190 Nick Exarhos (416) 956-6527 165 Housing Starts Housing Starts 140 May-13 CIBC MktPrior 6mma Nov-13 May-14 Nov-14 May-16F 196K 187K 183K Source: Statistics Canada, CIBC Forecast Implications—We are looking for a sideways trend in housing starts for the rest of 2015 and into 2016. Though residential investment won’t be a drag, don’t look for it to be major growth catalyst in the quarters ahead. Although other parts of the Canadian economy have braved choppier waters, the housing market has been well anchored. That’s partly been due to the stillaccommodative interest rate setting supporting appetites for new and existing housing, the former evidenced in the permit data. There, a flat trend has prevailed for the past several years centred around an implied 190K or so building pace. Market Impact—The market doesn’t usually react to housing starts and homebuilding isn’t at this point contributing much to GDP growth. After starts registered a slightly soft 183K in April, the stock of unused permits should help see starts rebound to 196K in May. Building permits for April are due out later in the morning on the same day, and should see a 5% drop on the month after a double-digit percentage gain in March. 4 CIBC World Markets Inc. The Week Ahead—June 8-12, 2015 Week Ahead’s Key US Number: 2.0 Retail Sales—May % % US Retail Sales 1.5 (Thursday, 8:30 a.m.) 6 1.0 Andrew Grantham (416) 956-3219 0.5 4 0.0 Retail Sales Retail Sales – ex auto Retail Sales – control group 2 -0.5 CIBCMkt Prior 1.5%1.1%0.0% 0.9% 0.7% 0.1% 0.6% 0.5% 0.0% -1.0 8 May-14 Sep-14 m/m % chg. (L) Jan-15 0 May-15F y/y % chg. (R) Is this finally the turnaround we’ve been looking for? For our forecast of a strong bounce in Q2 GDP, we certainly hope so. US consumer spending has been a serial disappointment in recent months, having failed to rebound after what was supposed to be a weatherrelated slowdown over the winter. The good news is that early signs for May are positive—in particular the surge in unit auto sales to a new post-recession high Forecast Implications—We need a sharp bounce in US retail sales to keep us on track for the 3% growth we currently forecast for Q2 GDP. And the surge in auto sales is an encouraging sign that we may get it. With savings replenished and gasoline prices still well below year-ago levels, we expect to see stronger numbers for retailing and wider consumer spending carrying on into the second half of the year as well. And just because consumers were hitting the car lots, it doesn’t mean that they weren’t spending at the malls as well. In fact, core retail sales have a positive correlation with auto sales, even in non-recessionary periods. Given recent encouraging news on the housing sector, look for consumers to start running down pent-up demand on furniture, appliances etc. in the months ahead. Market Impact—We are above consensus across the board, which would be supportive for the US$ and consumer-related stocks and negative for fixed income. In these often revised figures, watch for any change in April’s growth rate to also shape market sentiment. 5 CIBC World Markets Inc. The Week Ahead—June 8-12, 2015 Equity Insights Nick Exarhos Easier Rate Environment to Cushion Cdn Equities TSX More Skewed to Interest Rate Sensitive Sectors (L); Canadian Rates to Move More Gently (R) Despite the May jobs surge, Q1’s growth disappointments have stretched out the potential timeline of a tightening cycle. That stands in stark contrast with what’s happening south of the border, where an expected second quarter bounce—anchored by a strong retail sales report next week—should see the Fed raise rates by September. That will see the Canadian bond market outperform Treasuries, while also cushioning the TSX, which has a heavier weighting in interest rate sensitive sectors (i.e., financials, utilities, telecoms, and consumer discretionary) than the S&P 500. 50 Market Cap Weight in IR Sensitive Sectors (%) 45 35 40 30 35 30 25 25 20 20 15 15 10 10 5 5 0 Earnings Expectations a Bit Lofty While a smaller climb in the discount rate will be helpful, the Canadian economic slowdown, to say nothing of the fall in the broader commodity complex, will weigh on the earnings performance of the Toronto Composite. Our top-down model of TSX earnings points to roughly 6% year-on-year earnings growth for the next twelve months. The market, however, seems to have set loftier goals. Consensus has placed earnings growth at around 20%, a pace not far from where it stood earlier in the year. Swapping the consensus growth forecast for our model’s, and market valuation seems a bit more stretched. Stronger global growth, higher commodity prices—particularly for oil and lumber—and a healthier domestic economy will enable calendar ’16 earnings to leap by 18%. Equities may be in for an uneven ride in the next few months, as earnings disappointments are traded off against an improving medium-term outlook. Fcst Change in 10-year Rates (now to Jun-16, bps) 40 TSX S&P 500 0 Cda USA Source: Bloomberg, CIBC CIBC Top-Down Model Points to Slower Earnings Growth (L), Suggesting Richer Valuations on Broader Market (R) TSX Forward 12mo Earnings (Growth, YoY %) 22.5 20.0 TSX Forward 12-mo PE 22 20 17.5 15.0 18 12.5 16 10.0 14 7.5 12 5.0 2.5 0.0 10 CIBC Model Consensus w/ Consensus w/ CIBC Model Source: Bloomberg, CIBC Banks Beat, Street Shrugs Capital Markets Driving Canadian Bank Revenues (L), But Are a More Volatile Stream (R) Capital Markets Share of Total Revs (%) 6 12 10 8 6 4 2 CapMkts Wealth & Insurance 0 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 19.5 19.0 18.5 18.0 17.5 17.0 16.5 16.0 15.5 15.0 14.5 QoQ Standard Dev. (%, since 2010) P&C Banks posted across the board beats, but investors weren’t ready to throw wreaths at the feet of Bay Street CEOs. Much like we saw last quarter, strength in capital markets drove most of the positive results, pushing that segment’s share of overall revenues toward levels not seen in years. Revenues in that business line—recently driven by a boom in issuance and the increased uncertainty in financial markets which have filliped trading volumes— tend to be lumpy in nature, with quarter-on-quarter volatility there three times the magnitude of P&C revenues. Look for healthier readings on the Canadian economy late this year and into next to catalyze the more reliable segments of bank earnings, and lead to a more meaningful turn higher in shares. Source: Bloomberg, CIBC CIBC World Markets Inc. The Week Ahead—June 8-12, 2015 Currency Currents Andrew Grantham and Royce Mendes Canada Losing Share Trade Trends Diverge 120 Over the past couple of years, Canadian non-energy exports have trended almost in lockstep with US imports. Canada may not have been gaining market share in the US, but the weaker C$ meant that it was no longer losing it either. However, in recent months trends have diverged. One reason was the surge in international imports to the US as ships were finally unloaded after the port strike. But even after that impact subsided in April, US non-energy imports were running higher than our exports. As previously discussed, that could be because the manufacturing sector is already running into capacity constraints. We’ll get new figures on that front next week to see if there was any significant capacity improvement. Bringing investment back to manufacturing is one reason Governor Poloz seems happy for the C$ to remain around or below the 80 cent (1.25 USDCAD) mark. Index (Jan'13=100) 115 110 105 100 95 90 US Ex-Petroleum Import Volumes 85 Cdn Ex-Energy Export Volumes Apr-15 Jan-15 Oct-14 Jul-14 Apr-14 Jan-14 Oct-13 Jul-13 Apr-13 Jan-13 Oct-12 Jul-12 Apr-12 Jan-12 80 Source: Statistics Canada, Bloomberg, CIBC Retail Releases Not Good For US$ Recently (L), Strong Auto Sales Doesn’t Take Away Growth From Other Areas (R) 0.4 Correlation: Auto and Core Retail Sales 0.2 0.0 -0.4 May 13th Apr 14th Mar 12th Feb 12th Jan 14th Dec 11th -1.2 -0.2 2009- 0.0 -0.8 2002-07 0.4 If US consumers finally start buying, you should be buying the US$. Recent retail sales releases have fallen below consensus, with the greenback often seeing heavy losses on those days. However, early indications for May look good. Unit auto sales surged, and ex-auto sales typically have a positive correlation to monthly changes at the car lots, even after excluding recessions. We’ll need to see a strong retail sales release to hit our Q2 GDP forecast, thereby adding to expectations for Fed hikes and boosting the US$ in the process. Chg in US$ Index on Days of Retail Sales Releases 1992-2001 0.8 Buying Into the US$ -0.4 Source: Bloomberg, BEA, CIBC Surprise EUR Strength May Not Last Wider Bond Spreads to Pressure EUR Lower 2.0 After almost a year of depreciating versus the USD, can the recent strength in the EUR continue? It seems unlikely. The spread between US and German bond yields looks set to widen again, this time driven by higher US rates. Tighter monetary policy on the horizon in the US will cause markets to wake up to the reality that longer-term Treasury yields need to start moving higher. In contrast, in the euro area, zero interest rate policies are expected to prevail well into 2017 and, consequently, place a cap on bond yields. That divergence will increase flows into the dollar, at least until the Fed takes a pause on the path to higher rates. 0.90 1.00 1.5 1.10 1.20 1.0 1.30 1.40 0.5 Jan-2014 Jul-2014 Jan-2015 Jul-2015 1.50 US-German 10-Year Spread (%) EURUSD (Reverse) 7 Source: Bloomberg, CIBC CIBC World Markets Inc. The Week Ahead—June 8-12, 2015 CANADIAN RELEASE AND EVENT DATES June/July 2015 MONDAY TUESDAY 1 WEDNESDAY 2 THURSDAY 9 LABOUR PRODUCTIVITY 8:30 AM 11 12 CAPACITY UTILIZATION 8:30 AM LEVEL (%) TOTALMANUF. 14:Q383.2 83.4 14:Q483.6 83.7 15:Q1 NEW HOUSING PRICE INDEX 8:30 AM Bank of Canada Governor Poloz & Sr Dep Gov speak after Financial System Review @ 11:15 AM ET Bank of Canada Sr. Dep. Governor Wilkins speaks in Montreal at 4:15 PM ET 22 5 LABOUR FORCE SURVEY 8:30 AM AVG EMPLOYUNEMP HRLY (HSHOLD) RATEEARN MY%Y MAR 0.20.8 6.81.9 APR -0.10.8 6.82.4 MAY 0.31.1 6.82.9 BUSINESS CONDITIONS SURVEY 8:30 AM BUILDING PERMITS ($) 8:30 AM M M (RES)(NON-RES) FEB 2.2-5.0 MAR 6.622.1 APR SURVEY OF MANUFACTURING 8:30 AM SHIPMENTS M Y FEB -2.2-2.4 MAR 2.90.3 APR IVEY PURCHASING MANAGERS’ INDEX 10:00 AM 10 HOUSING STARTS 8:15 AM 000’s (AR) TOTAL SINGLES MAR190 52 APR183 59 MAY 15 4 3 INTERNATIONAL RESERVES 8:15 AM $BN $BN CHANGELEVEL MAR 2.91377.7 APR 0.16277.8 MAY-0.574 77.3 MERCHANDISE TRADE 8:30 AM $MN 12 MO. BALANCE FEB-2,042 529 MAR -3,853-4,624 APR -2,974-7,725 8 FRIDAY 16 INT’L TRANSACTIONS IN SECURITIES C$BN, NET 8:30 AM BONDS MONEY S TOCKSTOT MARKET FEB 9.9 -2.21.69.4 MAR21.0 -5.3 6.8 22.5 APR 17 18 WHOLESALE TRADE 8:30 AM 19 RETAIL TRADE 8:30 AM (Current$) MY FEB 1.52.4 MAR 0.73.1 APR CONSUMER PRICE INDEX 8:30 AM M(NSA) Y MAR 0.71.2 APR -0.10.8 MAY 23 24 25 26 PAYROLL EMPLOYMENT, EARNINGS & HOURS 8:30 AM 29 INDUSTRIAL PRICES 8:30 AM M(NSA) Y MAR 0.2-1.8 APR -0.9-2.4 MAY 30 GDP BY INDUSTRY 8:30 AM (2002$) GDPIND.PROD. MM FEB-0.1-0.7 MAR-0.2 -1.2 APR 1 2 3 CANADA DAY (HOLIDAY) (Markets Closed) All data seasonally adjusted except where noted “NSA”. M: per cent change from previous month. Q: per cent change from previous quarter at annual rates. Y: per cent change from year earlier. AR: Annual Rate. YTD: Year to date. Release dates are provided by sources outside CIBC World Markets Inc. Dates are subject to change. Sources for historical data: Statistics Canada, CMHC, Human Resources Development Canada and the Bank of Canada. 8 CIBC World Markets Inc. The Week Ahead—June 8-12, 2015 U.S. RELEASE AND EVENT DATES June/July 2015 MONDAY TUESDAY WEDNESDAY 2 1 PERS. INC & OUT. 8:30 AM SAVING INCOMECONS RATE M MAR FEB0.40.15.7 MAR 0.00.55.2 APR0.40.05.6 ISM MFG SURVEY 10:00 AM COMP. PRICES INDEXINDEX MAR APR MAY 51.539.0 51.540.5 52.849.5 2,5,7-Yr NOTE SETTLEMENT FACTORY ORDERS 10:00 AM M(SA) Y(NSA) FEB -1.0-6.5 MAR 2.2-5.2 APR -0.4-6.4 LIGHT VEHICLES SALES MIL (AR) Y MAR 17.0703.9 APR 16.4583.1 MAY 17.7146.3 THURSDAY GOODS & SERV. BALANCE (BOP) $B 8:30 AM GDS SERV TOT FEB -57.0 19.8-37.2 MAR -70.0 19.4-50.6 APR -60.7 19.8-40.9 ISM NON-MFG SURVEY 10:00 AM Beige Book 3, 10-Yr NOTE ANNOUNCEMENT 3-Yr BOND ANNOUNCEMENT 10 TREASURY BUDGET 2:00 PM 10-Yr NOTE AUCTION BOT (9:00) REDBOOK (8:55) 17 HOUSING STARTS 8:30 AMMIL (AR) M MAR0.944 4.9 APR 1.13520.2 MAY 11 22 EXISTING HOME SALES 10:00 AM Fed Chair Yellen speaks BOT (9:00) REDBOOK (8:55) BUSINESS INVENTORIES 10:00 AM 30-Yr BOND AUCTION MICHIGAN SENTIMENT (P) 9:55 AM 18 CPI M(SA) Y (NSA) MAR0.2 -0.1 APR 0.1 1.2 MAY CURRENT ACCOUNT BAL. 8:30 AM 19 23 DURABLE GOODS ORDERS 8:30 AM M Y MAR 5.1-0.7 APR -0.5-2.3 MAY NEW HOME SALES 10:00 AM 2-Yr NOTE AUCTION 24 GDP 8:30 AM (AR) REAL IMPLICIT GDPDEFLATOR 14:Q4(F)2.2 0.2 15:Q1(P)-0.7 -0.1 15:Q1(F) CORPORATE PROFITS 8:30 AM 5-Yr NOTE AUCTION CONSUMER CREDIT 3:00 PM 2,5,7-Yr NOTE SETTLEMENT 2,5,7-Yr NOTE ANNOUNCEMENT 25 PERS. INC & OUT. 8:30 AM SAVING INCOMECONS RATE M MAR MAR 0.00.55.2 APR0.40.05.6 MAY 26 MICHIGAN SENTIMENT (F) 9:55 AM 7-Yr NOTE AUCTION INITIAL JOBLESS CLAIMS (8:30) 30 S&P/CASE-SHILLER HOUSE PRICE INDEX 9:00 AM CHICAGO PMI 9:45 AM PHILADELPHIA FED INDEX 10:00 PM INITIAL JOBLESS CLAIMS (8:30) BOT (9:00) REDBOOK (8:55) 29 12 PPI 8:30 AM M (SA) Y (NSA) MAR0.2 -0.8 APR-0.4 -1.3 MAY LEADING INDICATOR 10:00 AM FOMC Rate Decision NET CAPITAL INFLOWS TICS 4:00 PM CONSUMER CREDIT 3:00 PM RETAIL SALES 8:30 AM M Y MAR 1.11.7 APR 0.00.9 MAY 8:30 AM CAPACITY UTIL/ IND. PROD. 9:15 AM LEV M Y MAR 78.6-0.3 2.3 APR 78.2-0.3 1.9 MAY 5 EMPLOY. SITUATION 8:30 AM NON- CIVAVG FARMUNEMP HRLY PAYROLL RATE EARN (000s)M % Y MAR 1195.51.9 APR 2215.41.9 MAY 2805.52.0 INITIAL JOBLESS CLAIMS (8:30) 16 15 NON-FARM PRODUCTIVITY 8:30 AM Q/Q (AR) Y/Y 14:Q4 (R) -2.1 -0.1 15:Q1 (R) -3.1 0.3 INITIAL JOBLESS CLAIMS (8:30) 9 3-Yr NOTE AUCTION 4 3 ADP SURVEY 8:15 AM BOT (9:00) REDBOOK (8:55) 8 FRIDAY 1 ADP SURVEY 8:15 AM ISM MFG SURVEY 10:00 AM COMP. PRICES INDEXINDEX APR MAY JUN 51.540.5 52.849.5 LIGHT VEHICLES SALES MIL (AR) Y APR 16.4583.1 MAY 17.7146.3 JUN 2 EMPLOY. SITUATION 8:30 AM NON- CIVAVG FARMUNEMP HRLY PAYROLL RATE EARN (000s)M % Y APR 2215.41.9 MAY 2805.52.0 JUN 3 INDEPENDENCE DAY OBSERVED (HOLIDAY) (Markets Closed, Banks Open) FACTORY ORDERS 10:00 AM M(SA) Y(NSA) MAR 2.2-5.2 APR -0.4-6.4 MAY 3, 10-Yr NOTE ANNOUNCEMENT 3-Yr BOND ANNOUNCEMENT INITIAL JOBLESS CLAIMS (8:30) BOT (9:00) REDBOOK (8:55) All data seasonally adjusted except where noted “NSA”. M: per cent change from previous month. Q: per cent change from previous quarter at annual rates. Y: per cent change from year earlier. AR: Annual Rate. YTD: Year to date. Release dates are provided by sources outside CIBC World Markets inc. Dates are subject to change. Sources for historical data: U.S. Department of Commerce, U.S. Department of Labor and U.S. Federal Reserve Board. 9 CIBC World Markets Inc. The Week Ahead—June 8-12, 2015 This report is issued and approved for distribution by (a) in Canada, CIBC World Markets Inc., a member of the Investment Industry Regulatory Organization of Canada, the Toronto Stock Exchange, the TSX Venture Exchange and a Member of the Canadian Investor Protection Fund, (b) in the United Kingdom, CIBC World Markets plc, which is regulated by the Financial Services Authority, and (c) in Australia, CIBC Australia Limited, a member of the Australian Stock Exchange and regulated by the ASIC (collectively, “CIBC”) and (d) in the United States either by (i) CIBC World Markets Inc. for distribution only to U.S. Major Institutional Investors (“MII”) (as such term is defined in SEC Rule 15a-6) or (ii) CIBC World Markets Corp., a member of the Financial Industry Regulatory Authority. U.S. MIIs receiving this report from CIBC World Markets Inc. 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