Daily Points

Scotiabank analyzes why the recent Canadian GDP contraction is too weak and distorted to be labeled a recession, while geopolitical tensions drive oil prices higher.

Key Takeaways

• 1.Canada is likely not in a recession despite a -0.1% q/q SAAR GDP contraction in Q1, as consumer spending remains positive and technical distortions (like gold imports) weighed on the data.
• 2.Oil prices have surged by approximately $3/barrel due to escalating conflict between the US and Iran and expanded warfare in Lebanon.
• 3.The Bank of Canada is still expected to hike rates in late 2026 (likely starting September), despite market pricing suggesting fewer moves.

Table of Contents

• Contributors
• KEY POINTS
• CANADA'S ECONOMY—WHY IT'S NOT A RECESSION & BOC IMPLICATIONS
• BOC IMPLICATIONS
• WEEK AHEAD HIGHLIGHTS

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