With 2Q revised lower and 3Q missing forecasts, Canada's output gap is well wider than what the BOC expected. GDP growth -- what there was -- came heavily from inventory accumulation. And that does not bode well for production to come, says National Bank's Krishen Rangasamy. Neither does the state of the global economy, a clear negative for Canada's export-reliant economy. At home, meanwhile, domestic demand looks hampered by a weakening housing sector, and listless investment from both the private sector and government. In this environment, it's no wonder core and headline inflation have eased, tracking well below the Bank of Canada's 2% target. That suggests a less hawkish BOC.
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