1. North American Outlook: Turning The Corner in 2011 February 2011 David Tulk, CFA Chief Canada Macro Strategist

2. Global economy transitioning from a sugar high to a sustainable expansion. Fiscal stimulus in the United States will ensure above- trend growth in 2011 while the underlying economy continues to heal. Canadian growth will slow, but become more balanced in 2011. North American Outlook in a Nutshell

3. US Economy Has Reached an Inflection Point

4. Fiscal Stimulus to Underpin 2011

5. Key Headwind to the Economic Recovery is the Labour Market

6. Canada is Not an Island

7. International Backdrop has Taken a Bite Out of Canadian Growth

8. Stronger US Growth Will Rekindle Demand for Exports

9. Housing Market Coasting Towards a Soft Landing…

10. … Due in Large Part to the Fall in Global Bond Yields

11. Consumer Spending Straining Under the Weight of Leverage

12. The Labour Market is Reaching its Cruising Altitude

13. On Balance, the Canadian Economy Still Has Significant Spare Capacity

14. Bank of Canada to Balance Domestic Momentum with Global Risks

15. Canadian Dollar: Stuck in a Range With You

16. Off Consensus Call for CAD USDCAD Forecast* 2010Q12010Q22010Q32010Q42011Q12011Q22011Q32011Q4 Bloomberg Consensus 1.021.061.031.000.990.98 1.00 TD Securities 1.021.061.031.001.021.091.061.03 *Forecast as of February 17, 2011; Source: Bloomberg, TD Securities

17. CAD Less Impacted by Europe, but Risks Remain…

18. … and CAD is Vulnerable to Volatility and Risky Assets

19. Longer-Term Fundamentals More Supportive from International Investors…

20. … And Foreign Central Banks

21. Considerable uncertainty means that volatility is the watchword of the day. We have seen the cyclical trough in interest rates. Yields will continue to rise in tandem with the economic recovery. USD will retain its safe-haven status in the event of financial market turmoil. Financial Market Implications

22. Recoveries from financial crises are typically subdued and take a long time. Except when stimulus has a role to play. The inevitable hand off from public to private drivers of growth has been delayed but not avoided. Canada is expected to become more balanced. Concluding Thoughts…

23. David Tulk, CFA Chief Canada Macro Strategist 416 – 982 – 0445 david.tulk@tdsecurities.com