The Daily Chase: Canadian GDP numbers increase odds of a cut

Here are five things you need to know this morning.

GDP numbers land with a thud: We got Canada’s latest economic reading today and the numbers don’t paint a picture of an economy firing on all cylinders. Statistics Canada reported Tuesday morning that the country’s Gross Domestic Product (GDP) grew by 0.2 per cent in February. That’s down from a revised 0.5 per cent in January and below the 0.3 per cent expected. The advance look on March is looking like a flat showing for that month, which means the first quarter as a whole is going to eke out very little growth, if any. The loonie plunged on the news, falling about a quarter of a cent. The weak showing adds to the likelihood that the central bank is going to be comfortable easing its monetary policy soon with a rate cut possibly as soon as June. Trading in overnight index swaps implies investors think there’s about a 50-50 chance of one at the bank’s next policy meeting. “I think that’s looking more likely after these numbers,” said Dylan Smith, a senior economist with Rosenberg Research, on BNN Bloomberg’s The Street this morning. “There’s no way around it – that was a disappointing number.”

Hong Kong launches spot crypto ETFs: After seeing the inflows into similar New York-based products earlier this year, asset managers in Hong Kong launched a batch of spot-price crypto ETFs on that city’s stock exchange on Tuesday. Three different companies launched bitcoin or ether-based products, and while early trading in the funds was sparse (about US$11 million worth changed hands), backers think that figure is poised to grow. Bloomberg Intelligence analyst Rebecca Sin estimates that the funds collectively may amass $1 billion over two years, but backers of the products are hoping for much higher — as much as $300 million in daily volume — by leveraging the first mover advantage in Asian markets to siphon trading that’s currently happening elsewhere. Officially, trading in crypto assets is banned in mainland China, but by approving the ETFs, Hong Kong is trying to make itself the Asian hub for trading in the assets, even as it currently sees only a fraction of the amount that is traded elsewhere.