Canada’s economy showed suprising strength in August and September. GDP expanded 1.2% in August, well ahead of consensus forecasts. Statistics Canada also released a preliminary estimate for September, which showed a 0.7% expansion. Taken together, the economy grew at an annualized rate 46.4% in the third quarter, in line with the Bank of Canada estimate from Wednesday. The size of our economy has grown to 96% of its pre-pandemic levels. But fourth quarter growth is expected to be much slower and we will not likely reach pre-pandemic levels for a while. The Canadian dollar did react to the news by firming up 0.2%. But any upside in the Loonie is limited these days by the overall global risk-averse environment. Stocks look to set an already very tough week further in the red, oil continues to trade at multi-month lows, and the risk factor is likely to be further elevated as we head into the US election early next week.
