BOC report is due at 1430 GMT on Friday 28 June 2019

via Scotia:

Q1 Survey (BOS) lost momentum in areas like

  • investment plans,
  • hiring plans
  • and inflation expectations

Future sales growth improved somewhat

The extent to which the Mexican tariff skirmish may influence the BOS results could be taken as reason to toss out the survey no matter what it says. The sample period went from early May to early June. Trump's surprise tariff announcement against Mexico came on May 30th but the US and Mexico struck an agreement to avert the tariffs late on Friday June 9th.

  • If it's a bad set of survey responses then one could dismiss it as an over-reaction to an issue that has hopefully gone away since.
  • If it's a good set of responses then perhaps the sample period was too skewed to before trade policy uncertainty escalated-not just because of Mexico but also as negotiations with China fell apart.
  • It's also unclear the extent to which continued plans to invest by small businesses sampled in the survey … up to May could translate into how larger and more likely export-oriented businesses think

Prior to the survey is Canadian GDP for April. This quick preview via TD, the bank forecasts 0.3% m/m:

  • We had originally called for 0.2% growth in April but were forced to revise our forecast after a significant upside surprise on April wholesale sales
  • Goods-producing industries should drive the headline print, reflecting further gains to energy output and strong residential construction, which will offset a modest drag from manufacturing, owing to a one-off decline in auto production
  • Elsewhere, services will benefit from a rebound in real estate activity and strong wholesale sales, although soft retail sales will weigh on the sector. A 0.3% headline print should provide some comfort to policymakers concerned over global headwinds, and keep Q2 GDP tracking well above the Bank of Canada's 1.3% projection from April
BOC report is due at 1430 GMT on Friday 28 June 2019

ps. Not two random passers-by in the photo! Probably off to Tim Hortons for a bite.