Canada: Moderation in GDP materializes with flat print in July – TD Securities

Analysts at TD Securities note that Canada’s industry-level GDP was unchanged in July, slightly below expectations for a 0.1% increase.

Key Quotes

“As expected, services were the main source of strength while weaker energy production weighed on the goods-producing sector.”

“This report will do little to change the BoC's outlook. The Bank will look through some of the energy sector headwinds, and we are still tracking Q3 growth near 1% which should be sufficient to push rate cuts into 2020.”

“FX: Knee-jerk CAD weakness should eventually be faded as the BOC is not in a rush to cut soon. The CAD should remain a better performer against the low yielders like the EUR. Little impetus for USDCAD to be shaken out of its 1.3150/3350 range.”