CIBC Research discusses its reaction to today's Canada Q1 GDP report.
"Oil production was the hole in a surprisingly high-calorie doughnut for the Canadian economy in January, as the rest of the economy performed much better than expected. The result was that monthly GDP for January advanced by 0.3%, despite that being the heaviest month for the curtailment of oil production in Alberta. The mining oil and gas sector contracted 3.1%, less than we had factored in, but the goods sector still managed a hefty 0.6% gain, helped by the expected rebound in factory output but an upside surprise in construction (up 1.9% but still down 4.1% yr/yr). Services gained a trend like 0.2%," CIBC notes.
"Overall, a better than expected start to Q1 after a near zero growth rate in Q4, and reason enough for the Bank of Canada to hang on to its hopes that the growth stall late last year will prove temporary. Negative for fixed income, bullish for the Canadian dollar," CIBC adds.