TD Securities Predicts Strong Rebound in Canadian GDP Growth

TD Securities economists Robert Both and Emma Lawrence are predicting a strong rebound in Canada's Gross Domestic Product (GDP) growth for Q2, driven by stronger exports and solid services activity. They forecast expenditure-based GDP at 3.5% annualized, beating market expectations of 3.3%. Industry-level GDP is expected to increase by 0.3% month-over-month, with new flash estimates showing continued momentum into July.

The economists expect the Q2 recovery to be driven by stronger exports, which will contribute to a sharp rebound in expenditure-based growth. They also note that industry-level GDP for June should mirror the Q2 strength, outperforming flash estimates of a 0.2% print. The constructive backdrop for the Canadian Dollar is expected to continue.

Thursday's payroll employment report and current account balance for Q2 will provide further insight into Canada's economic growth conditions. However, the main risk event this week is the release of Q2 National Accounts, which will give a clear picture of the country's GDP growth.