07:35 AM EDT, 09/27/2024 (MT Newswires) -- Canada's gross domestic product data for July and flash August at 8:30 a.m. ET Friday could have a major bearing on the size of the next rate cut by the country's central bank, said Bank of Montreal (BMO).

Real GDP numbers for July and flash August will guide estimates for the quarter, noted the bank. BMO expects the July figure to show a 0.2% month-over-month advance while Bloomberg consensus has 0.1% growth, up from the flat preliminary tally and a stalled June print, amid gains in retail sales and factory shipments.

Meantime, the August preliminary estimates for factory shipments and wholesale trade fell sharply, flagging a soft GDP figure for that month and zero momentum in the economy. The Bank of Canada Monetary Policy Report was looking for 2.8% growth in Q3, but that's a stretch barring an upside surprise on Friday.

On Tuesday, Governor Tiff Macklem said the BoC wants growth to strengthen from the first-half pace, suggesting that a sub-2% pace in Q3 would argue for a 50bps rate cut in October, according to BMO.

Later Friday, the Canadian government will release the July budget figures, added the bank.