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GILT SUMMARY

Sunak's Budget Faces Mounting Criticism

GLOBAL POLITICAL RISK

WHO Scraps Interim COVID Origin Rpt As Tensions Spike-WSJ

CORN TECHS

(K1) Remains Below The Feb Highs

SOY TECHS

(K1) Bullish Conditions Intact

US DATA

Q4 Final Productivity -4.2%; Unit Labor +6%

By Yali N'Diaye        
     OTTAWA (MNI) - Statistics Canada will release the December GDP by industry
and fourth quarter GDP reports Friday. Ahead of the releases, we highlight five
themes for particular attention:           
     - Analysts in a MNI survey expect GDP to be flat in December, handing a
weak start to the first quarter, with forecasts ranging from -0.1% to +0.1%. GDP
contracted 0.3% in November as manufacturing, construction and energy weighed on
the output of goods-producing industries. Services were flat.
     - A 1.2% drop in real manufacturing sales on lower petroleum and coal
products is expected to dampen the performance of goods-producing industries in
December. 
     - In services, a 2.5% decline in existing home sales is also expected to
weigh. However, gains in real wholesale sales (+0.3%) and real retail sales
(+0.2%), are expected to bring some offset.
     - Analysts expect real GDP to grow at an annualized rate of 1.0% in the
fourth quarter, with forecasts ranging from +0.9% to +1.4%, undershooting the
Bank of Canada's 1.3% projection. However, the underperformance is unlikely to
be enough to change the central bank's willingness to bring its policy rates to
neutral over time. It should, however, reinforce the lack of urgency to do so.
     - While net exports and business investment are expected to bring a
positive contribution, their growth pace could prove disappointing at a time
they are expected to carry more weight as engines of growth as household
spending is losing momentum. Voluntary oil production cuts could weigh on the
fourth quarter performance, as well as housing, which was already a drag in the
third quarter, when residential investment fell 1.5%. The BOC expects a further
growth slowdown in the first quarter, and it remains to be seen whether the soft
patch will prove temporary. A 1.0% annualized GDP growth would be half of the
third quarter's 2.0% rate.
--MNI Ottawa Bureau; +1 613 869-0916; email: yali.ndiaye@marketnews.com
[TOPICS: MACDS$,M$C$$$]