April Canada GDP +0.1% vs 0.0% m/m expected

Canadian GDP data for April 2018

• Prior was +0.3%

• GDP +2.5% y/y vs +2.5% expected

• Goods +0.2% m/m vs +0.6% prior

• Services 0.0% vs +0.2% prior

There were no revisions to the prior data. Initially USD/CAD fell down to 1.3209 but has rebounded to 1.3230.

The big surprise here was that manufacturing rose 0.8% in April despite soft manufacturing numbers in the month. Statistics Canada said much of the production ended up in inventories, so it may be reversed in the months ahead. It could also reflect a rush to produce/exports before US tariffs took effect on June 1.

Real estate activity rose 0.5% in the first sign of a pickup since new mortgage rules at the start of the year.

The weather was terrible in much of the country and that was a drag on retail activity, which was down 1.3%. On the flipside, utilities got a 1.6% lift.