Canada: Initial recovery through May and June appears to have been stronger than was once feared – RBC CM


The economy in Canada grew 4.5% in May, and preliminary data points to a 5% increase in June. Claire Fan, an economist at RBC, explains May gains were widespread and sees further recovery ahead likely, but at a slower pace. 

Key Quotes:

“Canada GDP rebounded a modest 4.5% in May alongside easing virus containment measures after dropping 18% over the prior two months. Activity was still 15% below February levels in May.”

“The initial recovery through May and June appears to have been stronger than was once feared, though not enough to reverse the decline in April. Statcan's preliminary estimate is that Q2 GDP declined around 40%, slightly less-bad than the BoC's central scenario (-43% annualized), and still close to the top of the range of possible in their April scenarios. However, much of that initial bounce-back came from an easing in virus containment measures that pushed activity to exceptionally low levels in April – along with unprecedented household income supports that probably more-than-offset COVID-related household income losses in Q2.”

“Further marginal gains will be harder to come by in the months to follow. And, absent a vaccine of more effective treatments, the threat of resurgence in virus spread will keep some containment measures in place – and spending (on services in particular,) subdued.  We continue to expect economic activity will still be running well-below year ago levels at the end of 2020.
 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Feed news

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!

Latest Forex News


Latest Forex News

Editors’ Picks

AUD/USD weaker ahead of RBA’s monetary policy decision

The Aussie is weak, despite receding dollar’s demand and the robust performance of US indexes. Coronavirus developments hit the commodity-linked currency ahead of the RBA.

AUD/USD News

Gold: This just might be as good as it gets for gold

The price of gold is trading at $1,975 within a range of between $1,960.54 and $1,986.76 at the time of writing, virtually flat on the day in consolidation having eeked out a fresh all-time high.

Gold News

USD/JPY struggling to retain the 106.00 level

The USD/JPY pair traded as high as 106.46 on Monday but struggles to retain gains above the 106.00 level amid lack of dollar’s demand.

USD/JPY News

Ethereum on its way to regaining $400 while BNB hit a new high at $22.5

BTC/USD is more stable than other coins right now but has been able to recover from its crash towards $10,500. It is currently trading at $11,369 and faces very little resistance until $14,000.

Read more

WTI drops below $40 on demand worries, OPEC+ output increase

Crude oil prices posted losses last week and seem to be struggling to shake off the bearish pressure on Monday. As of writing, the barrel of West Texas Intermediate (WTI) was trading at $39.85, losing 1.5% on a daily basis.

Oil News

Forex MAJORS

Cryptocurrencies

Signatures