The Canadian economy grew 0.4 per cent in May, a fifth consecutive monthly increase. Contributions to growth at the industry level were broad based, with notable increases in real estate, wholesale and retail trade, manufacturing, and professional services.
Based on two months of second quarter GDP data, we would estimate that the Canadian economy grew a modest 2.2 per cent from April to June. Today's strong release, along with yesterday's impressive US GDP print, will likely dampen any market expectations of future potential Bank of Canada easing which could exert upward pressure on Canadian bond yields.
Copyright BCREA – reprinted with permission