Weekly Economic Update

For the week of April 2-6.

Canadian GDP  declined 0.1 percent month-over-month in January, lower than the increased expectations of 0.1 percent. A sharp decline in oil production and real estate were the main culprits for the decline. Canada led the G7 for economic growth in 2017, but is now widely expected to slow this year after consumers pare spending. January’s decline in GDP puts the economy back on track for sub-2 percent growth for the third straight quarter. On a year-over-year basis, January’s GDP was hovering at a 2.7 percent pace, lower than the expected 2.9 percent pace.

Both US personal income and spending for February came in at the expected 0.4 percent and 0.2 percent, making February the second straight month spending lagged income. Alternatively, savings rate rose 3.4 percent, the highest since August 2017. Some economists believe spending could increase in the coming months, due to the robust labour market, stronger confidence, and lower taxes.

Canadian index releases today will be MLI’s leading indicator, Markit’s Canada Manufacturing PMI, and Bloomberg Nanos’ Confidence. Later this week, international merchandise trade and March employment figures will be released. US releases will be various manufacturing indices, the trade balance, and the March employment report.

Against the US dollar, the Canadian dollar is trading at similar levels to Thursday’s market close. Today’s expected trading range for the Canadian dollar is 1.2826 – 1.2926.

Source: Bloomberg

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