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Three-in-Five of Albertans Say They'd Vote in October to Stay in Canada, but Half Say The Question Is "Confusing", Finds Survey

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A long-simmering "what if" has become a reality in the province of Alberta, with federalists and separatists now on a five-month clock to convince Albertans to either smother the emerging flames of a sovereignty movement or "start a legal process" for a binding referendum to "separate from Canada."

Those are the options laid out in a 37-word question that the UCP provincial government, led by Premier Danielle Smith, will put to Albertans in an Oct. 19 referendum.

New polling data released on Monday from the non-profit Angus Reid Institute gauging Albertans' opinions leads to three key conclusions.

First, in answering the official October question, most Albertans would choose not to proceed with starting the process of a binding separation vote -- 61% versus 36%. Second, half (51%) find the question confusing.

Third, if they were to answer a simpler hypothetical question -- whether to leave or stay -- support for the federalist side increases -- 67% stay versus 31% leave.

The Angus Reid poll had 800 respondents.

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BMO on The Week Ahead in Canada

Canada's key release this week is the Q1 real gross domestic product on Friday, said Bank of Montreal (BMO).Q1 GDP looks to rebound 1.5% annualized after contracting modestly in Q4, noted the bank. Firm government and consumer spending will likely contrast with weakness in business investment, non-energy exports, and some regional housing markets.With growth expected to remain modest until some clarity on the CUSMA trade deal review emerges, and generalized inflation likely to remain subdued by labor market slack, the Bank of Canada isn't expected to ratify market expectations of a couple of rate hikes this year, stated BMO.Last week, Canada rates pulled back more than United States Treasuries on a calm consumer price index report that suggests underlying inflation is effectively close to the 2% year over year target, according to the bank. The 10-year Canada rate is down another 8 bps since Friday's close to 3.45%.

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Soft Inflation Dynamics Give Bank of Canada Room to Stay Patient, Says TD

Canadian financial markets seemingly "exhaled" a bit last week, "catalyzed" by constructive developments for the inflation backdrop, said TD.One important trigger was messaging that a United States-Iran deal may be in its final stages, noted the bank. Accordingly, oil prices slid.The other major catalyst was an April inflation report that was soft at its core. The Canadian five-year bond yield, which underpins the popular five-year mortgage rate product, was off about 15 bps on Friday while equities were higher on the week.Markets were braced for a "3-handle" on inflation last month. Instead, overall inflation clocked in at 2.8% year over year. While this was an acceleration from March, as expected given the jump in gasoline prices, there was little evidence that the inflationary pressures from the Iran war were materially feeding into prices more broadly yet, stated TD.There are a few caveats to keep in mind with April inflation, pointed out the bank. One is that it takes time for a spike in energy costs to feed through into core inflation. The bank reckons that Canada should be seeing some pass-through starting in June, which is also when hotel rates will be pressured higher by the World Cup games played in Toronto and Vancouver.The second is that soft underlying inflation could be signaling a weak economy that's limiting the ability of firms to pass through cost increases, added TD. Indeed, last week featured a steep 0.7% monthly decline for March retail sales volumes.Looking ahead, this week will bring the Q1 real gross domestic product report and a preliminary monthly reading for April. TD thinks the economy expanded by about 1.5% annualized in Q1, in line with the Bank of Canada's forecast.Potentially more interesting will be the early read on Q2 activity. This will be known with certainty this week, but earlier estimates suggest that the monthly GDP was flat in March. The labor market also cooled last month, while preliminary retail spending data points to a subdued performance after stripping away price gains. If economic activity was indeed modest to begin Q2, this could challenge the BoC's call for a 1.5% annualized gain in real GDP.All told, last week's events added notable weight to the narrative that the BoC can be patient on rates, with no move expected at its next meeting on June 10. TD sees the BoC staying on hold for the remainder of the year, conditional on a relatively speedy resolution to the tensions in the Middle East.

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