Canada: Strong recovery should damper expectations for additional BoC stimulus – TDS

Eren Sengezer FXStreet

Commenting on the Gross Domestic Product (GDP) report from Canada, "Q2 GDP was slightly better than feared at -38.7% on sharp contractions across consumption and business investment, although industry-level growth confirmed a solid end to the quarter with GDP rising 6.5% m/m in June," noted TD Securities analysts.

Key quotes

"Flash estimates point to another 3.0% m/m increase for July, which would put Q3 tracking near 40%. A stronger-than-expected recovery should damper expectations for additional stimulus from the BoC even if they are unlikely to tighten policy anytime soon."

"There was not much of a reaction in rates markets, and although we regard this as a very constructive report we expect to see rates bull flatten in the coming days on the back of steady demand for fixed income."

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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