RPT-PREVIEW-Canada Q3 GDP seen +1.4 percent annualized

(Repeats Nov. 29 PREVIEW without changes)

* What: Statistics Canada releases September and Q3 GDP

* When: Tuesday at 8:30 a.m. (1330 GMT)

REUTERS FORECAST:

(ECONCA: )

Q3 Q2 Forecast

2010 2010 range

GDP Q/Q Annualized +1.4 +2.0 +0.9 pct to

+2.0 pct

Sept Aug

GDP by industry M/M +0.1 +0.3 0.0 pct to

+0.2 pct

For individual forecasts see: [ECI/CA]

FACTORS TO WATCH:

Recovery: Third-quarter economic growth is expected to slow
further following a trend of deceleration seen in the
second-quarter. The reading is likely to reflect the cautious
external sector, with exports and manufacturing still soft.
That is expected to offset relatively solid domestic activity.

Trade: Recent trade data has indicated disappointing
exports, largely due to weak U.S. demand, signaling a further
drag on an already uncertain economic recovery. Exports to the
United States, Canada’s biggest trading partner, hit their
lowest level in September since November 2009. [ID:nN10169238]

Business investment: This has been an element analysts have
been watching as federal stimulus measures are set to come to
an end and governments have been urging the private sector to
fill the gap.

Consumer: Recent data showed the annual inflation rate
jumped unexpectedly to a two-year high in October, while higher
than expected retail sales fueled optimism consumer spending is
returning to relative health given uneven growth earlier in the
year. A moderating housing market tempers some of that
optimism. [ID:nN23105406] [ID:nN24234235]

September reading: The monthly print is expected to set the
tone for the fourth-quarter handoff. The market expects a tiny
gain for the month, but weak manufacturing will likely overcome
strength in the retail and wholesale sectors.

MARKET REACTION:

The GDP data is among the last critical pieces of
information to consider before the Bank of Canada’s Dec. 7
policy decision.

Last week, relatively upbeat domestic data briefly boosted
the Canadian dollar and spurred some speculation that the Bank
of Canada could resume its rate-hiking campaign sooner than
thought. But global financial markets were rattled lower by
worries over peripheral euro zone debt and geopolitical
concerns in Asia.

All of Canada’s primary securities dealers forecast the
central bank will keep rates steady at 1.0 percent into early
2011, according to a Reuters poll published on Oct. 19.
[CA/POLL]

Markets were pricing in about a 94 percent chance of steady
rates in December, according to a Reuters calculation of yields
on overnight index swaps. (BOCWATCH: )
(Reporting by Jennifer Kwan; Editing by Jeffrey Hodgson and
Rob Wilson)

RPT-PREVIEW-Canada Q3 GDP seen +1.4 percent annualized