Analysts at TD Securities note that Canada's  Q1 GDP extended the recent streak of sub-trend growth with another 0.4% print, although the details were more upbeat and confirmed a rebound in domestic demand.

• “Stronger consumption and a rebound in business investment were encouraging signs that reduce the odds of 2019 rate cuts, but hikes are still a ways off given uncertainty from elevated trade tensions and substantial slack in the economy and we continue to view 1.75% as the top of this cycle.
• We have seen some stabilization in the Toronto housing market although existing home sales continue to hold near a 7-year low at the national level while household leverage sits at a record high. Meanwhile, core inflation softened to 1.90% in April and will be hard pressed to recover given the muted growth backdrop and significant slack.
• The labour market remains the one bright spot in the domestic economy, perplexingly, with the April LFS reporting monthly job creation of 106.5k which pushed the six-month average to 51k. Furthermore, wages have finally started to pick up off the lows with average hourly earning for permanent workers running at 2.6% y/y. While this should provide the BoC some comfort to remain on the sidelines as the market prices in cuts, it is not enough to return the Bank to a tightening path.”