The 1.0% annualised gain in third-quarter GDP was not as bad as it looks, with most of the weakness due to a big drag from the volatile inventories component and the Bank of Canada likely to be encouraged by the sharp acceleration in consumption growth. Nonetheless, the downgrade to monthly GDP in September and latest preliminary estimate of another muted gain in October leave fourth-quarter GDP growth on track to be weaker than the Bank expected, meaning we are back to being closer to 50/50 in terms of a 25bp or 50bp cut from the Bank next month.
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