Loonie Tumbles After Canadian Economy Unexpectedly Crashes Back Into Contraction

After 4 straight months of MoM growth in GDP, the Canadian economy plunged 0.3% in October  (considerably worse than the 0.0% expectations) despite a resurgenece in crude prices. The Loonie is tumbling, back at 5-week lows, as manufacturing shrank a shocking 2.0% YoY - most since 2013.

  • Goods-producing sector fell 1.3% m/m in Oct.
  • Service-producing sector rose 0.1% m/m in Oct.
  • Largest upside contributor was real estate, +0.05 ppts
  • Largest downside contributor was manufacturing, -0.20 ppts
  • Manufacturing output falls 2.0% m/m, biggest decline since December 2013

Looks very Japanese...

Manufacturing output fell 2 percent -- the biggest decline since 2013 -- with durable and non-durable goods down 2.1 percent and 2 percent respectively. Factory output has been persistently weak, falling 0.2 percent since October of last year.


 

And the reaction is ugly, sending the Loonie to 5-week lows against the dollar...