Good Morning!
Canada’s economy grew more than expected in November, data revealed today, though only slightly more.
Economists had expected a flat GDP reading for November, a month beset by a major rail strike and oil pipeline disruptions. Instead growth edged up 0.1% from October.
One of the biggest drivers was a 2.1% surge in utilities, thanks to November’s really cold weather. That sector, along with construction, that was up 0.5%, was enough to counter the 1.4% drop in mining and oil and gas, said Brian DePratto, senior economist at TD Economics.
Capital Economics says the rise in GDP supports its view that the Bank of Canada is being too pessimistic about the economy. “We think that an even stronger monthly gain in GDP in December will ensure that the Bank keeps policy on hold in the coming months,” said Capital’s Canada economist Stephen Brown.
But while DePratto now thinks a fourth quarter contraction looks off the table, he cautions that growth is still pretty much at a standstill.
“The list of temporary factors weighing on the Canadian economy seems to grow longer every day, with the novel Coronavirus the latest addition,” he wrote in a note. “The tests of Canada’s economic resilience continue.”
Josh Nye, senior economist at RBC Economics, agrees that the GDP surprise does little to change the narrative that Canada’s economy stagnated in the fourth quarter.
Nye said despite the many transitory factors that hit growth in the second half of 2019, it was clear that Canada’s economy geared down, especially in Q, and that, as the Bank of Canada said last week, has opened the door for a rate cut.
RBC is sticking with its forecast of an April rate cut for now.
“What could tip the balance, though, is the evolving economic impact of the coronavirus (both here and abroad), and how much of a rebound we see in December’s activity indicators,” Nye wrote.
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The United Kingdom will leave the European Union at the stroke of midnight Brussels time today, after which the country will no longer be an EU member state and will be considered a third country. There will be a transition period until Dec. 31, 2020 in which Britain will continue to apply EU law but will no longer be represented in EU institutions Reuters
Heres what you need to know this morning:

  • Britain officially leaves the European Union
  • Prime Minister Justin Trudeau will visit Vetements Peerless Inc. in Montreal, and meet with employees to discuss the benefits of the new NAFTA for workers and the economy
  • Ontario Premier Doug Ford will be joined in Brampton by Prabmeet Singh Sarkaria, Associate Minister of Small Business and Red Tape Reduction, Monte McNaughton, Minister of Labour, Training and Skills Development, and Ross Romano, Minister of Colleges and Universities, to make an announcement
  • Ontario Minister of Finance Rod Phillips holds a budget consultation ahead of Ontarios 2020 budget
  • CIBC hosts 23rd annual Western Institutional Investor Conference. in Banff, Alberta
  • Notable Earnings: Imperial Oil, Exxon, Chevron, Caterpillar, Honeywell International
  • Todays Data: Canada GDP, U.S. personal income, consumer spending, Chicago PMI, consumer sentiment

Canadian companies were snapped up by foreign entities in 2019 at the fastest pace in a decade, according to Financial Post data. International firms bought 247 domestic companies last year for a total value of $59.6 billion, at least a 10-year high for value and the number of deals. The financial sector proved the most popular hunting ground. Fifty-eight M&A deals totalling $50.8 billion was a record for the sector. Thomson Reuters’ sale of data and analytics company Refinitiv to the London Stock Exchange topped the list with its $16 billion price tag. Toronto-Dominion Bank followed with its sale of TD Ameritrade Holding Corp to U.S. brokerage Charles Schwab for $14.9 billion. Both deals are subject to regulatory approvals. The biggest completed deal was mining giant Newmont’s acquisition of Canadian miner Goldcorp for $13.3 billion. Other Canadian companies going abroad include Cineplex, to be bought by U.K.’s Cineworld, and The Stars Group, to be acquired by U.K.’s Flutter Entertainment.
— Please send your news, comments and stories to — Pamela Heaven @pamheaven
With files from The Canadian Press, Thomson Reuters and Bloomberg