​EBC Markets Briefing | ​Loonie muted after GDP report; Amazon surged on AWS growth

The dollar firmed to a near three-month high on Monday after Fed Chair Jerome Powell said a rate cut in December was not guaranteed. Loonie was unchanged following a weak GDP report.

Canada's economy contracted in August against a consensus estimate of flat growth, data showed on Friday, and an advance estimate suggested the economy might escape a recession in Q3.

The sharp reversal was driven by broad-based weakness across both goods-producing and services-producing industries, justifying the BOC's first rate cut since March at its latest meeting.

The central bank said that that further loosening is contingent on the economic outlook evolving in line with their base case projections. The labour market is still showing weakness and hiring has slowed.

PM Carney has said that he has apologised to Trump over an anti-tariff advertisement that quoted Ronald Reagan. Washington called off trade negotiation with Ottawa last week.

The US has long had a reputation for being more business-friendly. Canadian CEOs and business groups want government to catch up — especially when it comes to capital investment.

The Canadian dollar showed a clear head and shoulders pattern, pointing to more losses ahead. We expect it to slip to 1.4030 per dollar in the short term.

Asset recap

As of market close on 31 October, among EBC products, Amazon shares led gains. The company posted Q3 earnings that exceeded expectations, along with strong growth in its cloud-computing unit.

Elon Musk dropped a huge detail on the Tesla Roadster which has been tested for years, saying it has "crazy technology" that might not even qualify as an automobile in the classic sense.

China's factory activity growth in October missed market expectations despite stimulus, dragged down by a sharper drop in new export orders, which weighed down the country's equity market.

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