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Upcoming Q4 GDPs: France, Canada & Turkey

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The last Friday of the month is crammed full of what are often second-tier GDP numbers. The markets see them this way as they are from smaller economies.

However, they are just as relevant for their respective currencies, despite being more niche trades. The summary of GDP figures can also give us an impression of where the world’s economy is going, not just the major economies.

Last quarter was dominated by consistently optimistic news about a pending trade deal between the US and China. The deal would at least create a ceasefire and provide some stability.

The trade war was to blame for a significant amount of underperformance, especially in emerging markets. But, given the fears over the spread of COVID-19 in the first quarter, these figures might be used as a high-water mark to measure performance going forward.

Turkey in the Spotlight

The day starts with the release of the Turkish GDP. Projections indicate that it will continue its recovery and show a nominal increase of 5.0% in the fourth quarter. This would be a significant increase from 0.9% in Q3.

Turkey came out of a technical recession. And, last year, it had relatively tepid growth given the geopolitical situation it was in.

The theme for the lira is likely to be primarily geopolitical over fundamental data for the currency. The latest comments from President Erdogan about Syria, and further escalations this time challenging Russia, have spooked some investors.

Even with solid growth in Q4, it might not be enough to support the currency. Inflation has trickled higher so far this year, despite the highest interest rates in the world.

Now, Erdogan is continuing to pressure for lower rates to support exports. Meanwhile, Turkey is in the crossroads of the COVID-19 outbreak. Therefore, fundamentals lean on the lira being under pressure for a while.

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Canada’s Freezing Economy

The USA’s northern neighbor escaped the brunt of the trade war and likely wouldn’t have benefitted from a turn towards trade normalization.

During the final quarter, there were also general elections, that could have kept businesses holding off investments until the uncertainty was resolved. It wasn’t until after the quarter was over that oil prices started to spike over geopolitical concerns.

For Canada, we are looking at monthly GDP. Expectations are for it to grow by 0.1% in January, repeating the same level from the prior month.

We can expect the final Q4 GDP to show an anemic 0.2% growth compared to 0.3% in the third quarter. That would imply a total annualized growth rate of 1.6%, just a bit higher than 1.5% prior.


With all the focus on Germany’s lackluster performance, the markets have somewhat ignored the second-largest economy in the euro area.

It’s not likely to immediately move the euro. However, it may just confirm the trend of poor data out of Europe which has become the new normal supporting increasing expectations of easing from the ECB.

Projections indicate that the final French GDP will repeat the preliminary figures. Quarterly growth of -0.1%, for an annualized rate of 0.8%. But this includes some of the impact of the strikes over pension reform.

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