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[music] >> Hello, I'm Greg Bonnell. Welcome to MoneyTalk Live, brought to you by TD Direct Investing. Every day, I'll be joined by guests from across TD, many of whom you'll only see here. We're going to take you through what's moving the markets and answer your questions about investing. Coming up on today show, we are going to discuss the potential to billion-dollar issue for the copper market with Daniel Ghali with TD Securities. MoneyTalk's Anthony Okolie is going to give us a preview of this week's big economic events and in today's WebBroker education segment, Bryan Rogers will show us how to use it one cancels other orders on the platform. So here's how you can get in touch with us. Just email moneytalklive@td.com or fill out the viewer response box under the video player on WebBroker. Before we get our guest of the day, let's get you an update on the markets. It's a Bay Street game today. Americans are having a long weekend and this is a market holiday for them. So volumes are pretty muted in Toronto, sort of a steady as she goes kind of trading day. You've got some modest green on the screen. Your 37 points to the upside on the TSX Composite Index, about 1/5 of a percent. Check in on Suncor. Energy stocks are seemingly a little calmer after the drama of last week and maybe some more drama, as we get that OPEC+ meeting and find out what they are going to do about production levels. There were some weird mixed messages last week in that space. God Suncor up a little shy of a full percent. Canadian Western Bank reported towards the end of last week getting a bit of a bid today. It's gaining strength as the session goes on, it's up almost 5%. We will take a longer look at the S&P 500, what kind of year it has been. Over the American holiday weekend, they did announce that they had a tentative deal on the debt ceiling, a bit of political posturing this week but a lot to chew ona little later in the show. And not to market update. The reopening of China was expected by some to be a boon for the commodity space, but to have a demand has weighed on the price of copper. Well, our featured guest today says things may only get worse in the short term with a $2 billion issue hanging over the market. Joining us now with more is Daniel Ghali, Senior commodity strategist with TD Securities. Great to have you back on program. > Thank you so much for having me. >> We are telling the audience about a $2 billion cloud hanging over the copper market. That's where we need to begin. What's going on? >> Listen, I think this is a game changer when it comes to copper. What we are talking about here is a $2 billion stockpile of copper coming out of the DRC. > The Democratic Republic of Congo? >> That's right. Essentially, what we are talking about is one royalty disagreement with one particular mine that essentially forced the mind to stockpile this copper since they were no longer allowed to export that metal. That's been going on since last July and just over the last month or so, they have come to a royalty deal. And I say that this is a potential game changer because prior to this, we were expecting a very delicate balance from copper markets. This stockpile and the renewed production from that mine could see that delicate balance turn into a surplus. That's a problem particularly in the context of weakening demand and growing supply out of Peru in particular. >> Before we get onto the demand story, I want to say that from reading your notes on a regular basis, you have had your eye on this issue out of the DRC for a while but it just fascinates me in terms of the different kinds of mechanics in countries that contain your market pretty quickly. >> Absolutely. Listen, when you're talking about commodities markets, these are real assets. So the more metal that is coming out of that country in particular, the more likely it is that is going to solve one issue in particular copper, which is the quickly low visible inventories. Across most of the major exchanges, inventories had been drawing for quite some time and just the notion that this metal might start to hit into exchange warehouses, you have traders offloading some unwanted metal into the exchange. And so definitely when it comes to real assets, these issues matter. > Alright, so that the supply side and some of the dynamics. On the demand side, as we set off the top, the China reopening has been a disappointment for a number of commodities, including copper. What happened to China? That seemed to be the conventional wisdom heading into this year. They will drop their COVID restrictions, they will be hungry for the commodities of the world and game on. It hasn't necessarily been that way. > Right. Going into the year, there was a lot of optimism about China's reopening. The reopening itself would catalyze a substantial increase in growth and you know what, partly that has been true but the recovery in China has been consumer lead, which doesn't tend to consume a lot of commodities. And particularly not when it comes to metals. The manufacturing side of the economy and the infrastructure and construction site has been struggling. That's what we had anticipated and continue to anticipate for much of this year because most developers are now focusing on surviving rather than thriving following last year's headwinds. >> What you think we need to see in China? What would turn that story around? Because a lot of it is that story we've had. Coming out of the pandemic, people have not been able to travel or have experiences open their wallets so that leads to recovery. But the industrial side, is not a bit of a puzzle? >> Yeah. I think you have to think through the applications of that. The first part of what you mentioned does translate into a boom and travel demand and we have been seeing now. That is supportive of the energy side for the commodities sector but not the industrial metals side. On the outside the equation, you probably do need construction activity to pick up the pace and you have some structural headwinds there. Local governments are struggling and they tend to finance themselves heavily using land sales, but land sales are down substantially because of some proactive regulations that have been put in place. So I think you do have some structural headwinds there. You need consumers to grow more confident in order for them to support the housing market again. But we just have not seen that happen as of yet. I would add is well that the second part of the stories that we shouldn't forget that heading into this year, we also had just went through one of the largest stockpiling impulses in a decade at the very least. Not only supply chains were impacted, which means that metal consumers for instance would hold more inventories on their books but we also had the war in Ukraine which threatened supply chains globally as well. So the context basically tells you that metal users kept an overhang of inventories which has now been drawing down. He didn't need to import copper as much as they would otherwise into China because of that. Looking forward, we do think their inventory picture is a little bit more balanced and so if it wasn't for this story out of the DRC, if it wasn't for Peruvian exports going back up, we would probably have seen inventories drop which would've supported copper prices. Another reason why the story is a game changer. >> Now here in the West, we have been talking about the threat of a possible recession for quite some time now. The recession is always on the horizon. Is it here or is it coming or is it is going to blow by without harming us at all? What does that do to copper demand? If the West indeed does head into a softening that could lead to a recession. >> So far, we have been seeing goods demand start to dry up. That's actually been accelerating. There are signs that the demand for end-user products is already slowing. We expect that that is going to continue, that that theme is going to continue but as Western demand slows down, you also have to consider that a large part of the Chinese economy is export oriented. > That's where it's connected, right? If you expect China's industrial economy to recover, someone has to be buying with their producing, right? > Exactly. So that's part of the story that doesn't make sense for the near term optimistic picture for copper. >> Obviously, these are some near term challenges that you have laid out pretty persuasively. Longer-term, what's working and copper's favour? I mean, you can't see the word copper in conversation with the people saying, EV opportunity, electric vehicles. >> Yeah, I would say that that is a very resilient story. We do have electric vehicle demand across the world booming right now. EVs are capturing market share from internal combustion engines at a really fast pace. China has been leading the charge on that with humongous gains in 2022, but the rest of the world is actually starting now to ramp up their demand for electric vehicles. Those vehicles consume a substantially higher amount of copper, so it is a very bullish story in the longer term. Particularly when you consider the idea that investment or capital expenditures in new copper supply are really lagging what you would expect given the high price environment. So we are looking at a picture where demand is likely to boom and supply just is not likely to catch up. > What would it take to change that investment story, for people to take that longer-term look and say, we realize right now the issues laid out, the DRC, the copper coming out of the market, we are a bit flushed now but in coming years we will not be. >> Precisely. Historically what it would take to change that story would be higher prices that would incentivize more supply. But what we have seen over the past few years and this theme has accelerated since COVID is that if you map the carbon intensity of different sectors within our economy to their reinvestment ratios that you see in the sectors, you find that mining and metals, oil and gas, because they are carbon intensive, they don't tend to see those seem levels of reinvestment ratios. The ESG team is one of the constraints for supply growth going forward. >> Interesting commentary from Daniel Ghali and a great start to the show. We are going to get to your questions about commodities for Daniel and just moments time. A reminder that you and how to best any time. Just email moneytalklive@td.com or fill out the viewer response box under the video player on WebBroker. Right now, let's get you updated on the top stories in the world of business and take a look at how the markets are trading. A tentative deal on the US debt ceiling will now had to Congress for a vote, a process that will no doubt STIR some headlines from lawmakers on both sides of the divide. While several politicians have already expressed disappointment with the agreement, both Pres. Joe Biden and House Speaker Kevin McCarthy say they are expressing optimism that the deal, which would suspend the debt limit through January 1, 2025, will pass before June 5, many moving parts to the story. June fit is important because the treasury last week told us that was when they would run short of money if they did not get an agreement. Nvidia continues to make headlines in the artificial intelligence space. The chipmaker is collaborating with MediaTek on connected car technology using Nvidia semiconductors. Separately from that story, the company says it will be building an AI supercomputer in Israel. Shares of Nvidia soared last week on a much longer than effective revenue forecast, all based on AI demand. Crescent Point energy is saying it's restarting production that was temporarily shut-in due to wildfires in Alberta. The energy company says some 45,000 barrels of daily oil production was brought back online over the last several days at a Kaybob Duvernay site. Crescent point at the fires will impact their annual production targets. A quick check in on Bay Street. The Americans have a long weekend and this is the market holiday for them. Got the TSX right now up a modest 32 points, obviously very light volumes as is what happens when the Americans are on holiday and we are trading. Up a little shy of 1/5 of a percent. We are back now with Daniel Ghali, taking your questions about commodities. Let's get to them. Obviously, the debt ceiling has been on people's minds over the past couple of days. What does the debt ceiling deal mean for commodities? >> I think you have to consider that a lot is already been priced in. The optimism has been touted by politicians for at least a week now. And really I think market participants do expect the US government to come up with a deal because the alternative just wouldn't work for financial markets and wouldn't work for the public. So I don't think that the debt ceiling optimism is going to have much of an impact on commodities prices but on the margin, you could expected to weaken gold slightly. Gold being looked at as a safe haven in the context of if a deal would not be struck but overall probably muted price action. >> We will talk more about gold later in the program. We don't want to jump ahead of ourselves. Someone got a question about silver. To get your view on that? >> Sure. Listen, silver is an incredibly interesting metal because, and many people don't know this, it is heavily involved in the electrification, in renewable energy. So when you look at silver, most of its usage today is in industrial fabrication. The rest of it would be as a precious metal. Within the industrial fabrication sector, which is about 60% of its demand, photovoltaics or the demand for silver for use in solar cells is increasing its portion of total demand. It is likely to continue to grow as solar is emerging as one of the preferred renewable energy sources. So part of the story is that the capacity, the renewable energy capacity is increasing and of course that would be therefore bullish for silver demand. But the other part of the story is that we have new technologies when it comes to solar that are likely to use a substantial amount more silver than the current technology as well. So you have two sources of an incremental demand boost from silver technologies. >> I understand, I'm not an expert, when they mind certain metals, you're not getting only one metal. You're getting more than one thing at the ground. When it comes to silver, he talked about how perhaps longer term, we are not mining of copper but are we of mining and of silver to meet demand? >> Silver is often a byproduct of other metals. So the same story that's true and copper is true for zinc and lead mines and silver tends to be a by-produc for those mines as well so what we are certainly just not seeing a lot of mine supply growth on the horizon. I should mention however that a lot of silver supplies also coming from the scrap sector. >> Reclaiming what is already being used? >> Right, recycling. Absolutely. Because solar is increasingly using these types of industrial uses, the amount of silver you can recover through recycling is decreasing. certainly a positive supply story in the long term. >> Let's take another question now from the audience. What is your outlook for the price of oil heading into the summer driving season? >> Summer driving season, of course the implication there is a seasonal boost to demand. I would say traders around the world right now are laser focused on the demand side of the equation because the world does expect a Western led recession. The data just isn't corroborating that when it comes to the energy side of the commodity sector. The demand side of the equation has actually been quite resilient and even if the US were to fall or were to have a hard landing, we would only expect global energy demand to fall marginally so I don't think that even in a recession that we would see a significant impact on prices because demand were to fall. On the contrary, when it comes to summer demand, driving season and their expected recovery in China which a large portion of that is also seasonal, we think the demand side of the equation is going to be a boon for oil prices. >> Part of that question always makes me think someone is laying out their budget for the summer road trip for the family because those are coming up in the next couple of weeks, what could OPEC and its partners do to maybe mess up somebody's budget? I'm thinking higher prices. I feel like we got mixed signals out of OPEC and their partners last week, saying one thing and another. >> There were some comments out of Saudi Arabia's energy minister that I think were potentially misconstrued by market participants. But the comments I'm referring to… >> The ouch. You're going to feel some ouch. >> There is some debate as to whether that was meant for traders it today orfor a past decision from OPEC. I think traders are aware that we are close to the strike on the OPEC price put. Prices were continue to fall OPEC would respond and the reason they can do that is because rest of world production just isn't growing despite the high price environment. So OPEC is a producer. Geopolitics is in the mix now. They are far more comfortable keeping prices elevated than they might've been 10 years ago. so definitely I think were prices to fall significantly say in a recession, OPEC would respond. >> When I think about production outside of OPEC, even in a country like ours, we are not seeing, at least in this part of the cycle, energy companies announcing massive investments and new ways of getting their hands on oil. They aren't doing share buybacks, special dividends, dividend boost. If that trend continues, a continuation of some of the themes of the miners, and women of oil to get us through to the next energy phase or as we get through this transition? >> Banerjee transition, in my view, is one of the most important themes for the next decade. Part of that story, particularly when it comes to energy markets, is that demand growth is only likely to subside slowly whereas supply growth really isn't because of energy producers seethat we are near peak demand, they are just less likely to reinvest in future production growth. The other part of the story we kind of touched on earlier where because it is a carbon intensive business, and they are less incentivized to reinvest it for future production growth. So we have both sides of that equation that should be supportive for energy prices going forward. >> As always at home, make sure you do your own research before you make any investment decisions. We are going to get back your questions for Daniel Ghali on commodities in just a moment's time. And a reminder that you can get in touch with us any time. just email moneytalklive@td.com. Let's get our educational segment of the day. There are different types of trades available on WebBroker. Here today goes through how one cancels other orders work is Bryan Rogers, Senior client education instructor with TD Direct Investing. Always great to see you. Let's talk about this order in particular and how it works. >> Great to see you as well, Greg. So one of the things we go through in our order entry classes, what would happen if you want to enter a sell limit order on the stock you already own and then he simultaneously wanted to put in a stop order? I will put you on the spot for a second. I will throw this question to you. If I were to enter a sell order on 100 shares I own and a limit, and then a few minutes later I tried to enter a stop order on my broker, what do you think would happen? >> Am I allowed to count on my fingers for this one? >> You are. [laughing] >> Would one cancel the other? >> Well, that's what we hope would happen but oftentimes he will tell people that if you are trying to do it just a regular way, if you try to enter the cell above and stop below, it will usually give you an error message. Your computer won't explode. But it's going to give you an error message saying you've already entered one order. First one will go into the system and then we'll say you have already entered one order representing this 100 shares. You can't enter the second order. I think you're on the right track, Greg. That's where one cancels other comes in. It's a feature on the WebBroker platform that we can now enter both. We can enter trades to sell at above and below the market. There are other ways you can use it but that's one of the more common ones. So what I want to do is jump into WebBroker and show everyone how to set this up. I think some people really like to see because of the fact that they are wondering,hey, I want to be doing that, I want to be selling a stock when it goes up, but I want to be safe if it goes down. I want in order to cover that as well. So I have Shopify open here's an example and you're gonna want to click just anywhere to get to the order ticket. You are going to click on the cell tab. It doesn't really matter because you're going to have to go to strategies essentially anyway. You're going to click on strategies. And then you are going to go on to the one cancels other. And this is where you are now going to be able to enter those multiple orders. You will be able to see it here where you can enter the symbol. For example, you can enter Shopify, we just have to enter whatever one we are interested in selling. I'm going to put in the cell order. Let's say you have 100 shares and then I'm going to go to limit and you're going to select your limit order. so this is putting in your trade and above the market. If I say 81, 82, $81.82 is the current bid, or $0.32 is the current bid, I could do that. But normally, you're gonna want to put in well above the market. If I think Shopify is going to go up to 90, I put it at $90 as an example. So this is your hope, you want to go up and this is the profit you're going to take. That's allow you to do that first-rate but if you notice them below, these go down to the second section, as soon as you click this other part, or, I'm entering this limit order to be above the market, or I could enter a stop order. You know what a stop order is yet. It's an order where you can enter below the market. So when you go through until the stock drops to a certain trigger price. I'm just going to use a simple one which is called the stock market order. I will put in the same quantity, 100 shares, and if I put in the trigger price saying if I think Shopify could drop down to 70, maybe I bought a while ago at 50 and I want to lock in the profit from the 50 to 70, I don't want to necessarily sell it but I want to protected on the downside, I can put the trigger at $70 and then once I got a preview order, just going to tell you what trade you are entering. So it's one cancels other. If one goes through, it automatically cancels the other order. so you don't have two orders that can be triggered on the same stock. >>if we try to do them separately from each other, we get the error message. Now I know. So we are using this. We know that when we buy and sell in WebBroker, there is a commission. So what does that look like if you are using this kind of order? >> That's a good question. I think a lot of people get confused. Is there a fee for this? This is a cool feature. Am I going to have to pay additional fees? There is no fee for that but there is still the commission, like you said. He doesn't cost you a commission at all necessarily, but until one of those gets triggered, if one of them does and the other gets cancelled, your only ever gonna have one commission. If it goes up to your limit price which is what we want to have happen, we're gonna have a profit, the orders to go through a, and the other order cancels medially. But if it goes down and get stopped out and you sell your stock, you limited your laws were prevented… Maybe locked in a profit on something that you got it a lower price, once the stop order goes through which is going to be a $9.99 mission on the other order gets cancelled. Only one commission. > Great stuff as always. Thanks for that. >> Thanks. >> Our thanks to Bryan Rogers, Senior client education instructor at TD Direct Investing. And make sure to check out the learning centre in WebBroker for more educational videos, live, interactive master classes and upcoming webinars. Before I get back to your questions on commodities for Daniel Ghali, a reminder of how I can get in touch with us. Do you have a question about investing or what's driving the markets? Our guests are eager to hear what's on your mind, so send us your questions. There are two ways you can get in touch with us. You can send us an email anytime at moneytalklive@td.com or you can use the question box right below the screen here on WebBroker. Just write in your question and hit send. We'll see if one of our guests can get you the answer right here at MoneyTalk Live. We are back with Daniel Ghali, we are taking your questions about commodities. Lots coming in, so let's get to the next one. Someone wants to know your outlook for natural gas. Heading into the winter, we had a very different story than we have right now. >> Right. Last year, the story was all about the supply side of the equation. Of course, Russia, the war in Ukraine, threatened to remove one of Europe's largest producers of natural gas and energy as a whole. Today, the picture looks very different. Supplies are actually plentiful, both in the US and in Europe. And part of that story is just the weather hasn't cooperated with natural gas bowls. We were seeing very mild weather both through the winter and coming into the summer season. Meanwhile, the same story that we spoke about when it comes to China's tepid recovery for industrial metals is true for natural gas. The demand for LNG just hasn't picked up the pace, as you would have otherwise expected given the reopening because the industrial engine is still sputtering. So looking forward, what you need for the outlook for natural gas to changes to the demand side to recover substantially, or for supply to be curtailed, particularly in the US. So far, we haven't seen that despite prices significantly lower than previous years, but that outlook could change as producer hedges roll off. >> You mentioned LNG. It was interesting through the fall heading into the winter when there was fear that if you got a colder than inspected winter in Europe, you have a limited gas supply. You can have some real problems. People were saying, what is Canada doing in terms of exporting LNG? Why do we keep missing the opportunity? But now since we thankfully, for the people of Europe in this case, escape that worst-case scenario, does that take away the impetus for people to put the Pauchant LNG in Canada? >> I think that there is an argument for long-term benefits for increasing our export capacity, which is extremely limited here in Canada. You have to consider that a lot of the consumers of natural gas, particularly in Europe, tend to prefer long-term contracts but are unwilling to commit to long-term contracts beyond five years. For Canada, what that means is there's probably an opportunity for the private sector to step in with orchestrating spot deals for the next five years if we did have that capacity to export. >> Okay, let's get another question here about the precious metal gold. You expect gold to get back into record territory? It has receded somewhat in recent weeks. >> It has receded quite significantly actually since it marked its year-to-date highs, its all-time highs in fact. We do expect the gold will sometime reach new highs and that's the scenario that we expect the US will fall into a recession that will support the decline in inflation and will allow the Fed to cut rates. That should be a boon for precious metals and gold in particular. We also consider that structurally we have seen by far the largest demand for gold from central banks. that has picked up the pace since the war in Ukraine. Part of that story is because governments, particularly in the East, are now concerned about sanctioned risks, about the US and Western countries confiscating their reserves. So there is this notion that diversifying away from the US dollar reserves might be beneficial for countries in the East. That's been contributing to a very significant ramp-up in physical gold demand from central banks. >> What would be the biggest impediment for gold to get back to new highs again? Is it simply central banks and inflation and that continuing fight? >> I think so. There's a case that inflation will remain significant lease stickier for a significantly longer period of time then most of us anticipate, which would force the Fed to continue its hiking regime. That would be pretty negative for precious metals, especially when you consider the fact that we are trading near all-time highs. But one point that I think it's worth mentioning there is that discretionary traders and gold, in our view, are still very much under positioned in gold. So we are not seeing an environment where positioning and gold is actually extreme, that more said hikes would catalyze a significant drop off in gold prices because you do have that strong demand from the physical side. >> Okay, this next question is going to test your powers of prognostication. You have a crystal ball? When will Chinese demand improve? >> Chinese demand for commodities as a whole? >> Probably. >> We are looking for Chinese demand to improve following the fourth quarter of this year. The premise being that we will see interest rate cuts in the West and so the economic engine globally can start to recover from this period of elevated interest rates. >> Okay. Metals that may benefit from EV demand. We talked about copper. Hard to make electricity without copper, but there are other metals a play. >> Absolutely. We talk with electrification, this is one of the dominant themes in the next 10 years. I would say that there are significant buckets of commodities that we should consider. One of those dayswhat we call the greenification commodities. These are the commodities that are going to have a substantial increase in demand as a result of electrification. Another bucket is the troublesome sector. these are commodities that are polluted and we are likely to see governments actively curtail their supplies. Aluminum is one of those metals. It is extremely energy intensive and contributes a lot to carbon emissions. We are likely to see not only demand pickup because of the electrification but also supply being curtailed. > Interesting stuff indeed. We will get back to your question for Daniel Ghali on commodities in just a moment's time. As always, make sure you do your own research before making any investment decisions. and a reminder that you can contact us at any time. Do you have a question about investing or what's driving the markets? Our guests are eager to hear what's on your mind, so send us your questions. There are two ways you can get in touch with us. You can send us an email anytime at moneytalklive@td.com or you can use the question box right below the screen here on WebBroker. Just write in your question and hit send. We'll see if one of our guests can get you the answer right here at MoneyTalk Live. It may be a holiday south of the border today, but the Americans will get back at it tomorrow. Of course, there's always something on deck for us to keep our eyes on. Our Anthony Okolie has been digging into give us an update on what we can expect. What we have on the docket? >> I think the big thing is the US debt ceiling and the developments there. That's going to remain front and centre this week. We know that US Pres. Biden and Congressional House leader Kevin McCarthy reached a tentative deal over the weekend, just before the June 5 date when the US debt default, will default on its debt. This would raise the borrowing limit for two years past the 2024 election as well as curb government spending during that time. Of course, what this does now as it sets up a vote on the bill by the House of Representatives slated for this Wednesday, May 31. Now, with financial markets close, we are however seeing some immediate market reaction on the news of the deal on the credit default swap market where the US credit default swaps for six months narrow. The cost of maturing against a US default over the short term fell. However, when you look at the five-year swap rate, it rose, suggesting that there is still some caution in the markets about this deal. Now meanwhile, traders will also be watching some other data that's coming out this week, primarily we've got the US ISM manufacturing print for me. TD Securities is expecting to see an improvement, a modest improvement there, but still again below the 50 point level, which indicates that the manufacturing sector is still contracting. Now we also get a big US jobs number on Friday and TD Securities expects the US-made payrolls two common at 200,000 jobs. They also look for the unemployment rate to stay stable. They see wage growth rising 0.3% month over month, that would equate to just under 4 1/2% year-over-year gross. Here in Canada, of course we will get the Canadian GDP for the first quarter. TD Securities is looking for the Canadian economy to bounce backwith a 2.5% annualized gain for real GDP in the first quarter, that's roughly in line with the Bank of Canada's monetary policy report. While a week or month in March does give the Bank of Canada, according to TD Securities, a cover to maintain its pause through June. > I've been finding the jobs releases so fascinating recently because inflation, for good reason, has been taking all the headlines of the past year, taking some of the oomph, if I can use the technical term, out of jobs Friday, it used to be jobs Friday, but the fact that jobs are hanging and so strongly when economists are thinking that you raise rates and weaken the economy, this has been a really fascinating one. is a good or bad? I'm never sure how the market is going to reacts going into thesereleases. >> We have seen a strong US job market and I think that the market is expecting that the central banks will look for some weakness in the job market before they actually pause. Here in Canada, of course, we know that the Bank of Canada has pause on rates. They left the rates unchanged at 4 1/2% in April. TD Securities notes that markets have been pricing in further tightening after a big upside surprise, you mentioned April's CPI with another tightening in October. Now TD Securities continues to look for the Bank of Canada to keep rates on pause through the year. They expect the economy to slow over the course of 2023 and have pushed back their first rate cut to the second quarter of 2024. Now, they do see some upside risk towards more tightening especially if growth does not slow or dis-inflationary pressures begin to stall and you mentioned the job market continues to be red-hot. We'll have to wait and see if that does cooldown and that will give further, the Bank of Canada further room to perhaps pause or eventually cut rates, as TD Security says, next year. >> Sunshine and warm weather of the weekend softened my brain but that's a good reminder that there's a lot to keep our eyes on. Thanks for that. >> My pleasure. >> MoneyTalk's Anthony Okolie. Let's check in on the TSX Composite Index. The holiday weekend, a market holiday south of the border. You did get that tentative agreement on the debt ceiling over the weekend. You got some green on the screen. It will call it 20 points the upside, a little more than 1/10 of a percent. Let's take a look at Crescent Point energy. The energy names are having some stability today. Crescent Point up a little shy of a full percent although it did noticesome weakness and capstone copper, our guest Daniel Ghali telling us about the $2 billion overhang that's going to be coming out of the Democratic or Public of Congo and make sure that we are well supplied for copper in a time where demand is not as strong as you might think. Got capstone down a little bit more than 1%. The American markets are closed, I want to take a look at the S&P 500 and its performance over the past year, it's been a pretty strong couple of days, at the end of last week a lot of excitement around AI lifting names like Nvidia and some of the other chipmakers which are considered to be leaders in the space but definitely a rally in some of the tech names last week. We are back now with Daniel Ghali, Senior commodity strategist with TD Securities, talking commodities. This question came in a couple of moments ago. Can you please explain why silver is more volatile than gold? >> Sure. There is actually a fascinating study out of the world gold council which tries to estimate the total trading volume in gold relative to other traditional markets like T-notes, treasury notes, or affects payers and so on. And what's difficult about that is that gold, likeother commodities, are treated using futures but there is actually very large over-the-counter market and that is true for gold and for some of the other commodities. So when you combine all those different venues, what they found is that gold is pretty much just as liquidas an FX pair like the euro Sterling, that's something that's pretty surprising to most people given that those are pretty liquid FX markets. Or even more liquid than gilts or some other large nations bond markets. Silver on the other hand is much less liquid than gold and that does definitely contribute to its higher volatility. >> Also the spread. In a more liquid market, for equities, you can bring the spread between the bid and ask, silver is suffering from a liquidity problem. > Absolutely. The market depth that you have in silver, meaning the amount that you can buy or sell within a price range is significantly lower than it is in gold. >> Interesting set. Let's get an update on the aluminum market. You mentioned aluminum of a bit there when we're talking about EVs. What's the state of the market right now? >> The state of the market and aluminum is quite interesting. You have, on the one hand, pretty significant supply disruptions coming out of Asia. China in particular is the world's smelting hub when it comes to aluminum and some provinces there have been struggling with their power supply. That relates to a significant heat wave that is making its way through Asia and that, in turn, is curbing the power supply which could impact aluminum production going forward. The other side of the equation is, again, we mentioned earlier, which is that the demand-side has been fairly weak so far this year. So far, aluminum prices have been quite range bound. We have a negative story on the demand-side, a negative story on the supply side and those who are balancing out. >> Always great perspective, Daniel. Always enjoy having you here and look forward to the next time. >> Thank you very much. >> Our thanks to Daniel Ghali for joining us from TD Securities and chatting about commodities with us to kick off the week. Stay tuned. On tomorrow show, Marisa Jones, utilities credit analyst from TD Asset Management will be our guest taking your questions about utility. A reminder, course, you get a head start with your questions for us. Just email moneytalklive@td.com. That's all the time we have for the show today. Thanks for watching. We will see you tomorrow. [music]