Canadian Dollar: Balanced growth supports CAD – TD Securities

TD Securities strategists expect Canadian real Gross Domestic Product (GDP) to rise by 0.2% m/m in May, exceeding the flash estimate and extending April’s 0.5% gain. They highlight balanced growth across goods and services, with manufacturing, existing home sales and retail trade all contributing. Labour market strength underpins the outlook, while June GDP is seen moderating after a strong start to Q2.

Canadian growth seen moderating after Q2 surge

"We expect real GDP to rise by 0.2% m/m in May to exceed flash estimate for +0.1% and build on last month's 0.5% increase, with balanced growth across goods and services."

"Manufacturing will provide a source of strength for the goods sector as services receive a tailwind from a sharp increase for existing home sales alongside the rebound in retail trade."

"Labour market conditions also support another stronger performance in May, with a large increase in hours worked alongside the sharp pickup in job creation."

"This report will also provide new flash estimates for industry-level GDP in June where we look for some moderation after the strong start to Q2."