Canadian international trade deficit likely narrowed in December

Canadian international trade data for the month of December is set to release tomorrow. According to a TD Economic research report, the international merchandise trade deficit is likely to have narrowed modestly by CAD 100 million from CAD 1.1 billion in the prior month, thanks to a surge in nominal energy exports.

Crude oil prices rose around 5 percent sequentially in December, which alongside a rise in real energy shipments should provide the driving force for total exports with motor vehicles exports expected to see little change.

“Elsewhere, CN Rail’s return to normal operations should provide a modest tailwind after labour disruptions weighed on rail traffic during the month of November. On the other side of the ledger, we expect a more muted performance for imports owing to soft domestic demand and a poor reading on advance US exports”, added TD Economics.