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ECB's Stournaras Buoys Bunds, EUR


BoE Comments Underpin Short-End Sell Off


(K1) Stabilises


Expiries for Mar 01 NY cut 1000ET (Source DTCC)


(K1) Giving Up Gains

By Greg Quinn and Anahita Alinejad
     OTTAWA (MNI) - Canada's economy defied all expectations in 
November as output grew for the first time in three months, which may 
ease the central bank's concern about a prolonged slowdown. 
     Gross domestic product grew 0.1% on the month following a similar 
contraction in October, Statistics Canada reported Friday from Ottawa.  
The MNI Median was for no change in November, with a minority of 
estimates calling for a contraction. 
     Output climbed even as transportation, wholesalers and automobiles 
were hit by strikes at CN Rail and UAW, and oil shipments curtailed by 
the ruptured Keystone pipeline. 
     The report follows BOC Governor's comments last week that 
the door is open to the first rate cut since 2015 on signs that 
global trade weakness is draining domestic spending. Today's report 
likely still leaves the economy on track for growth of less than 1% at 
an annualized pace. 
     Energy output rose 0.5% in November, and cold weather boosted 
utilities by 2.1%, Statistics Canada said. Construction also climbed by 
0.5%, the best gain since July, on gains in residential and commercial 
     "Increases in 15 of 20 industrial sectors more than offset notable 
declines in the mining, quarrying and oil and gas extraction and 
transportation and warehousing sectors, influenced partly by disruptions 
in rail transportation service and crude oil pipeline transportation," 
StatsCan's report said.
     The CN Rail strike cut rail transportation by 3.8%, while 
transportation fell for the fifth time in six months with a 0.9% 
decline. Potash mining dropped 18% as weak global demand led to 
     While the one-offs suggest growth may stabilize following November, 
most economists and the BOC say growth will be weak again in the first 
quarter. The economy grew 1.5% in November from a year earlier, a pace 
that may not be fast enough to keep the output gap from widening further 
and putting pressure on the BOC's inflation target.      
     One bad piece of news was StatsCan revised down September to show 
GDP stalled, rather than its earlier estimate of a 0.1% increase.
--MNI Ottawa Bureau; +1-613-314-9647;