Canadian economy likely to have grown 0.1 pct in October on rebound in energy and rise in services

Canadian October GDP growth data is set to release tomorrow. According to a TD Economics research report, the industry-level GDP is likely to have grown 0.1 percent in the month, owing to a recovery in energy and a pickup in services.

A sharp decline in oil and gas production subtracted 0.1 percentage points from growth last month and it is likely to get roughly half of that back before production cuts take effect in November. Manufacturing output would be restrained by refinery shutdowns, countering strength in durable goods manufacturing, while residential construction would benefit from the rebound in housing starts.

On the services front, a pickup from a muted 0.1 percent rise in September is expected, with retail activity providing a tailwind on a recovery in auto sales although ongoing weakness in home sales would be a drag on real estate.

“This would leave Q4 growth tracking in the mid 1 percent range, below estimates from the October MPR”, added TD Economics.

At 18:00 GMT the FxWirePro's Hourly Strength Index of Canadian Dollar was highly bearish at -143.472, while the FxWirePro's Hourly Strength Index of US Dollar was bearish at -76.5674. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex