The Canadian economy is firing on all cylinders. Yesterday, monthly GDP data for June showed that Canada experienced economic growth close to 4.5% (annualized) in the second quarter of 2017, with consumers the essential drivers of that performance. According to our economists, two factors could explain this situation:
1. Job creation and wage growth of more than 4% in a year
2. The wealth effect caused by real estate prices
Certainly, most analysts expect a slowdown in GDP growth in the coming months, however, these figures are nothing short of spectacular.
Obviously, the Canadian dollar reacted sharply, ending the day up more than 1.1% against its U.S. counterpart. In light of this information, our economists have raised their growth forecast for the Canadian economy in 2017 to 3.0% and expect the Bank of Canada to announce five key rate increases by the end of 2018.
Today, we’ll wrap up the week with U.S. job data.
Julien Duquette
Range of the day: 1.2380 – 1.2520