Bullish Pattern in AUD/CAD After the Reversal Following Canadian GDP

The Q1 GDP report from Canada was just released, showing a cool off in March. Although the real monthly figure was better than anticipations. But, the annualized number came way below expectations of 5.4%, at 3.1%. Canada is not too affected by Russian Oil since it is a major exporter of Oil itself. But, the increase in prices will start showing the effects on the economy during Q2.

Canada March and Q1 GDP Report

• Q1 GDP annualized +3.1% vs +5.4% expected
• Prior quarter was +6.7% (revised to +6.6%)
• March GDP +0.7% m/m
• Feb GDP +1.1% MoM (revised to +0.9%)
• April flash GDP estimate MoM +0.2%
• Q1 real GDP QoQ +0.8% vs +1.6%
• Q1 GDP price index QoQ +2.9% vs +1.9% prior

The Bank of Canada estimate was 3.0% and their interest rate decision is tomorrow. This is a big miss, though still slightly above the BOC estimate. After yesterday’s strong current account data, many were leaning towards a 6% reading.

DGP Report Details

• Export volumes declined 2.4%
• Investment in residential construction rose for a second consecutive quarter, up 4.3%
• Business investment in non-residential structures (+2.9%) and in machinery and equipment (+0.9%)
• Compensation of employees rose 3.8% on a nominal basis
• 8.1% household savings rate in the first quarter vs 6.9% in Q4 (prior to 2020, the avg was 3.5%)

Tomorrow’s BOC decision is a slam-dunk 50 bps hike but the July meeting is at 80% and could drift a bit lower. I still strongly suspect the BOC will signal aggressive action but this and the sudden stop in housing will give them a bit of pause.

AUD/CAD Daily Chart – Finding Support at the 100 SMA

Starting to reverse after yesterday’s doji candlestick

ABOUT THE AUTHOR See More

Skerdian Meta

Lead Analyst

Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.

Related Articles

Dow Jones DJIA Trims Losses on Fed Rate Cut Bets after Soft US GDP, PCE Inflation

1 week ago

Save

Forex Signals April 30: USD GDP and Inflation on Top of MSFT and Meta Earnings

1 week ago

Save

Canada Elections 2025: Will Political Shifts Send USD/CAD Soaring or Crashing?

2 weeks ago

Save

Comments

0 0 votes

Article Rating

Subscribe

Login

Notify of

new follow-up commentsnew replies to my comments

Please login to comment

0 Comments

Oldest

Newest Most Voted

Inline Feedbacks

View all comments