INSTANT VIEW-Canada's economy posts 5.6% annualized growth in Q1

The emphasis now for the Canadian economy is how quickly they can release the vaccines and how quickly they can reopen because the data print already suggests that there is a contraction of 0.8% in April, which is almost completely eroding March's gains.

Canada's first quarter annualized growth rose 5.6%, reflecting continued strength in the economy influenced by favorable mortgage rates, government transfers and stronger employment, Statistics Canada said on Tuesday.

Canada's economy is expected to contract 0.8% in April, according to a preliminary estimate, while March real GDP rose by 1.1%, Statscan said. STORY:

MARKET REACTION: CAD/ LINK:https://www150.statcan.gc.ca/n1/daily-quotidien/210601/dq210601a-eng.htm

COMMENTARY SIMON HARVEY, FX MARKET ANALYST FOR MONEX EUROPE AND MONEX CANADA

"The data isn't reflective of the last two months of lockdowns and the subsequent reopening ... The emphasis now for the Canadian economy is how quickly they can release the vaccines and how quickly they can reopen because the data print already suggests that there is a contraction of 0.8% in April, which is almost completely eroding March's gains. "The sentiment is, once measures are scaled back, Canada's economy is very elastic to reopening so there is not going to be too much of a lag in the pick up in growth conditions."

DOUG PORTER, CHIEF ECONOMIST AT BMO CAPITAL MARKETS "No big surprise there. Almost every pre-release we've seen pointed to a decline in April. I don't believe it significantly changes the outlook for the Bank (of Canada). They were talking about the output gap and inflation getting back to target by late 2022. That's still a long way from here, so I don't think that this really significantly changes their timeline."

"There was some view out there that the Bank might be going even earlier and this will probably calm that kind of talk." "Consumer has done better than expected around the turn of the year. When things partially reopen, consumers will spend big time and when things are fully reopened, they will engage completely I believe."

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