Canadian international trade deficit likely to have widened in October

Canadian international trade data for the month of October is set to release this week. According to a TD Economics research report, the international trade deficit is likely to have widen to CAD 2 billion in the month owing to a sizeable drag from motor vehicle exports.

The UAW strike and ensuring parts shortage weighed heavily on Canadian vehicle production, and preliminary figures show a pullback consistent with the 6 percent sequentially fell in U.S. auto imports.

The should add to a broader decline in export activity, with forestry products expected to edge lower in response to reduced activity at lumbemills, while lower oil prices will also act as a headwind to nominal exports.

“Imports should see a more modest decline consistent with softer US exports and sluggish domestic demand”, added TD Economics.