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Q1 GDP Preview - 0830ET

CANADA DATA
  • Q1 GDP lands at 0830ET, with consensus 2.5% and the BoC’s April forecast of 2.3% annualized after Q4’s surprisingly soft 0.0% on the back of a heavy drag from inventories.
  • With the Bank estimating potential growth at 2.3% in 2023, it would mark a quarter with zero progress in demand softening to allow supply to move in better balance.
  • Being the last major release before the BoC decision on Jun 7, a beat could see the 25bp hike priced later in the year start to be expected next week having been between 1/4 and 1/3 odds in recent days.
  • In the separate monthly data, analysts see power outages in Quebec and the federal workers’ strike disrupting April GDP, with CIBC and RBC looking for another slight decline after the -0.1% M/M indicated by the March advance. RBC estimate the PSAC strikes shaved off 0.3pps from April GDP.
  • This latest monthly momentum into Q2 could help bias market reaction to the quarterly data the BoC focuses on.

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