Sunday, 3 June 2012

Tepid Canada Growth To Keep BOC Sidelined For '12 -BMO

BMO Capital Markets says March GDP of 0.1% in Canada doesn't provide a great handoff to 2Q, and it's not holding its breath for a strong pickup in growth given a still-soft U.S. economy and confidence headwinds emanating from Europe. Growth of 1.8% in Q1 as whole is well below the 2.5% projection penciled into the April MPR by the Bank of Canada, suggesting it may have to push back its estimate for the output gap to close in the first half of 2013. "Against this backdrop, the Bank of Canada will likely be on hold for the remainder of the year," BMO says.