Files released on Friday showed monthly GDP in Canada rose by 0.1% in February, below market consensus. Analysts at CIBC tag that a slowing financial system might perhaps well most certainly most certainly additionally merely quiet motivate the Bank of Canada (BoC) on preserve for the relaxation of 2023, in attach of pulling the arena off on yet any other rate hike, sooner than cuts advance early next year.
Key quotes:
“After sprinting out of the gate to commence 2023, the Canadian financial system had already hit a wall by March. Monthly GDP rose by 0.1% in February, which became once a tick below the consensus forecast and a noticeable deceleration from an upwardly revised 0.6% scheme in January. Moreover, the March attain estimate means that GDP fell a slight to total the quarter, implying slight momentum heading into the second quarter.”
“The feeble pause to the principle quarter, combined with the negative nonetheless momentary impact of the public sector strike on Q2 GDP, will increase the menace of a contraction in financial exercise all the map in which thru the second quarter. However, the Bank of Canada will overview thru that volatility, and point of interest as an different on trying to salvage and motivate inflation and inflation expectations below administration. Whereas a weakening financial system might perhaps well most certainly most certainly additionally merely quiet cease policymakers pulling the arena off on yet any other pastime rate hike, we don’t explore cuts forthcoming except early next year.”
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