Analysts at Royal Bank of Canada say the next week brings some key Canadian data that might determine whether the Bank of Canada (BoC) follows the Fed in adopting a more dovish stance.

• “The BoC’s Business Outlook Survey is an important input into BoC decision-making. The latest edition will garner even more attention than usual given a further escalation in global trade tensions since April’s survey.
• Just ahead of the BOS, April’s GDP report will give insight into whether a softer business sentiment is finding its way into activity indicators. March’s GDP figures showed plenty of resilience with nearly every sector growing in the month. April should be a bit more mixed with manufacturing output expected to be flat. That sector will be a focal point in the coming months given a slowdown in industrial production globally (including in the US) that could intensify with recent tariff hikes.
• Retail sale volumes edged down 0.2% in April, though other services industries should pick up some of the slack. On balance we look for GDP to edge up by 0.1% in April, which following March’s more robust gain, should leave Q2 growth tracking a solid 2% annualized rate.”