Canada: 2Q GDP is expected to reveal a sizeable contraction - TDS

Research Team at TDS, suggests that the Canada’s second quarter GDP is expected to reveal a sizeable contraction though industry-level growth for June should be much more uplifting.

Key Quotes

“TD is in line with the market for the quarterly print and looks for Q2 GDP growth to come in at a very weak -1.5% q/q (annualized), with strong residential investment offsetting soft business investment, trade activity, household consumption and government spending.

Meanwhile, we are below-consensus on industry-level growth for June and expect a 0.4% m/m print for June (market: 0.5% m/m). Markets are unlikely to react too harshly to the quarterly figure due to the disruptions caused by the Alberta wildfires and should instead focus on the monthly figure for its implications for Q3 growth.”