Canada: Economic growth was probably flat in January - ING
|"Canadian GDP growth was probably flat in January and while there are reasons to be optimistic about an improvement going forward, a dovish Federal Reserve and lingering uncertainties surrounding both the domestic and global economic backdrop suggest the chances of a rate hike are diminishing," argue ING developed market economist James Smith.
Key quotes
"We think economic growth was probably flat in January, although there are some potential bright spots. After three months of weakness, manufacturing sales recovered (+1% MoM). Encouragingly, sales rose 2.5% in Alberta. This province has the most exposure to the oil industry."
"While oil prices regained some poise in January, the lagged impact of the earlier decline saw average gasoline prices dip. Lower receipts at gasoline stations dragged retail sales lower in January."
"We also suspect that policymakers will want to wait and see how oil prices and the global trade backdrop develops over coming weeks. So if the BoC does opt to hike in 2019, it’s unlikely to come much before the end of the year. With the Fed firmly in dovish territory, it’s possible that the BoC follows suit and prolongs its current pause. As is the case in the US, investors are currently pricing in at least one rate cut this year."
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