30 August 2018

Although the 2.9% national growth is the largest increase this year so far, it was still by 0.2% lower than economists predicted. For instance, the U.S. economy reported a 4.2% gain.

Canada’s results will hardly convince the central bank to raise its key lending rate next week in order to cool down the economy.

“It should have been a sharp increase for the Bank of Canada to raise the rate next week, and we got only a soft downside surprise,” – Bank of Montreal economist Doug Porter said.

Traders believe there’s less than a one in five chance of a rate hike at the next meeting. In case of October, the chances go up to three in four.

“The second quarter economic numbers were not enough for the BoC, so it’s not a reason to change the interest rate policy this time”, – DePratto said.

“If there is no shocking news from the NAFTA side, we’ll keep focusing on October 24 as the most likely date of the next rate increase”, – Porter noted.