Canada 1Q GDP on track to undershoot BoC forecast, but details will roughly fit the scenario painted by the central bank in the April Monetary Policy Report, supportive of eventual rate hikes, Action Economics says. It sees growth of 2.0% vs the Bank of Canada's 2.5% forecast, but expects the GDP report (to be released June 1) to show further growth in consumer spending, and investment in housing, and machinery and equipment alongside positive contribution from net exports, supportive of ongoing economic expansion this year. It sees the central bank hiking rates 25 basis points in January 2013 followed by three more moves to 2.00% at end-2013, a scenario that "would leave the largest gap with the (presumably unchanged) Fed funds rate that the bank can likely tolerate."
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