First quarter U.S. real GDP growth came in at 3.0% Q/Q (annualized), slightly below expectations.

• U.S. consumer confidence in April shot up to the highest level seen since March 2008, marking the sixth increase in seven months.

• Personal income advanced 0.4% M/M in April, while personal spending was flat on the month.

• New home sales surged 15% in April, sending inventories down to 5 months supply; existing home sales jumped 7.6% on the month, but inventories managed to rise to 8.4 months supply. 

• S&P Case-Shiller Home Price Index was flat in March, though prices are sitting at 2.3% above year ago levels.

• Concerns over European sovereign debt subsided somewhat this week, assisted in part by China’s denial on Thursday that it will reconsider its investments in European government bonds.

• After having shed close to 5% so far in May, the S&P TSX gained 2% during the week.

• The uptick in risk appetite led to a retreat from government issued bonds and a rise in bond yields.

• At the margin, the likelihood that the policy rate renormalization would begin on June 1st in Canada may have risen following the easing of concerns over Europe’s debt turmoil as we head into the weekend.

• Risks surrounding the specific future path of the overnight rate will persist as long as external risks stemming from European sovereign debt concerns linger.

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