CANADA: April's GDP Estimate Could Have Bearing On BOC June Cut Odds

Friday's GDP data (0830ET) is the last data between today and next Wednesday that could boost BOC rate cut pricing above 50% for that decision (it's currently implied at just under 30%).

• Broad consensus is for Q1 GDP to print 1.7% Q/Q SAAR (after 2.6% in Q4 2024), and that would be in line with the BOC's 1.8% estimate as per the April MPR. But attention will be paid to the April flash monthly estimate, and to a lesser extent, March's final reading.
• BOC's more "optimistic" scenario is for 0.0% quarterly growth in Q2; the more pessimistic is -1.3%; analyst consensus is -0.6%. Given implied base effects, a weak figure for March (was 0.1% in the StatCan preliminary estimate) and negative estimate for April would make it more difficult to achieve a positive Q2 figure.
• Scotiabank pencils in 1.7% Q1 growth, with March 0.2% M/M, and April 0.3% "based on limited readings such as a solid gain in hours worked but also the possibility of a small and temporary lift from the election" - that would see Q2 growth tracking around 1.5%.
• TD is more pessimistic: they see 1.5% Q1 growth. While March is projected to match the flash 0.1% estimate, for April TD expects "a larger impact from US tariffs/uncertainty" in their expectation for a 0.1% decline.
• CIBC sees 1.5% Q1 growth, with the March reading confirmed at 0.1% M/M but April's showing a "further worsening... weakness in manufacturing and transport categories as tariffs took effect", with a "modest decline" in that month's GDP leaving Q2 forecasts tracking a contraction. But "without that weakness in April GDP, we will likely be pushing our call for a June cut later into the year."
• National Bank is in between, eyeing 1.7% Q1 growth with 0.1% M/M for March, the latter "with positive contributions from mining/quarrying/oil and gas extraction, retail trade and transportation/warehousing having likely been partially offset by declines in manufacturing and wholesale trade."