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Real GDP Modestly Stronger Than Expected In Aug/Sep Flash

CANADA
  • Real GDP was a little stronger than expected in August at 0.1% M/M (cons 0.0%) after upward revisions and with the September flash also 0.1%.
  • It tentatively leaves monthly GDP up 1.6% annualized in Q3, close to the 1.5% the BoC forecast in Wednesday’s MPR (revised from 2.0% prior) with just 0.5% seen in Q4.
  • Within the details, construction fell for the fifth month but real estate showed surprising resilience.
  • Despite subsequent weakness in US pending home sales, GoCs outperform the cheapening in Treasuries, pushing Can-US 2Y yield differentials to new recent lows of -57bps.

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