Canada's real GDP fell 0.1% in April

Canada's April GDP release was particularly disappointing (-0.1%m/m, cons +0.1%). Within the sector breakdown, mining, oil & gas was a key source of weakness, partly due to "maintenance shutdown and production difficulties" according to StatsCan. 

More importantly, the April number makes the BoC's 1.8% projection for Q2 GDP as a whole essentially unachievable which calls into question its forecast for the output gap closing by the "end of 2016". 

Today's outcome places an even greater importance on the upcoming MPR - markets are now pricing 17bps of cuts by year end (up from 5bps) and economists agree that the risk has risen substantially and could rise further depending on the June employment report and Business Outlook Survey (both due next week).