25 Mar 2016
CAD: 16Q1 GDP is now looking solid - TDS
Research Team at TDS, notes that the Bank of Canada set a very low bar for near-term growth in the Jan MPR.
Key Quotes
“15Q4 GDP has since surprised to the upside, and 16Q1 is now looking solid. Not only was December’s hand-off strong, but January manufacturing and retail sales data came in far better than expected. The new budget provides further upside news to the 2017 forecast, which should leave the BoC comfortably on the sidelines until 2018.
The rally in CAD since the start of the year reflects the impact of the recent pick-up in oil prices and the shift in interest rate outlook between the Fed and the BoC. We also think market positioning played a critical role. These have mainly played out, so we see a case for USD/CAD to rise from here. We believe the Fed outlook will remain key with rate hikes likely to outpace forwards.”
Key Quotes
“15Q4 GDP has since surprised to the upside, and 16Q1 is now looking solid. Not only was December’s hand-off strong, but January manufacturing and retail sales data came in far better than expected. The new budget provides further upside news to the 2017 forecast, which should leave the BoC comfortably on the sidelines until 2018.
The rally in CAD since the start of the year reflects the impact of the recent pick-up in oil prices and the shift in interest rate outlook between the Fed and the BoC. We also think market positioning played a critical role. These have mainly played out, so we see a case for USD/CAD to rise from here. We believe the Fed outlook will remain key with rate hikes likely to outpace forwards.”