Loonie Spikes After Canada's Best First-Half Economic Growth In 15 Years

Thanks to a surge in government spending in Q2, Canada's GDP grew at 4.5% SAAR. This is the best growth since Q3 2011 and is the best growth of all G-7 nations in Q2.

This is higher than the highest economist estimate...

Bloomberg reports that Canada’s consumers, benefiting from a buoyant jobs market and rising home values, are on a tear. Household consumption rose at an annualized 4.6 percent pace in the second quarter, following a 4.8 percent gain in the second quarter. That’s the best two-quarter gain since before the 2008 recession.

It’s a tale of two industries for Canada’s housing market. Residential construction was little changed with repair and renovation work posting stronger gains but overall residential investment figures were hurt by slumping activity in the resale market. Total investment in residential structures fell at an annualized 4.7 percent pace due to a sharp decline in the so-called ownership transfer costs associated with real estate transactions(down an annualized 24.1 percent)

The surge in growth should help cement the chances the Bank of Canada will continue raising interest rates in coming months as the nation’s economy nears full capacity, and that expectation has prompted notable strength in the Loonie...

Canada’s economic growth over the past two quarters was the best first half for the economy since 2002.