Canadian international trade records surplus in May, GDP likely to grow 2.5 pct in Q2

Canadian international trade recorded a surplus in the month of May after recording a deficit in the prior month. The nation saw a trade surplus of CAD 0.76 billion, following an upwardly revised deficit of CAD 1.1 billion in April. Consensus expectations were for a deficit of CAD 1.7 billion. Exports grew strongly by 4.6 percent sequentially to CAD 53.1 billion, while imports rose 1 percent to CAD 52.3 billion.

The picture remains strong even after accounting for price changes. Export volumes rose considerably by 4 percent, while import volumes rose 1.2 percent. The sharp rise in exports was comparatively widespread, spanning 9 out of the 11 product categories. Leading the way were increased exports of motor vehicles and parts and the volatile aircraft and other transportation equipment category.

Exports of energy products and metal ores and non-metallic minerals also came in solid. The rise in some of these categories was partially because of transitory factors, including a resumption in activity in motor vehicle production plants after the shutdowns in April. Out of 11 product categories, imports rose in 6; however, they were mainly driven by increased imports of aircraft and other transportation equipment and motor vehicles and parts.

“May's international trade data joins a suite of other data releases confirming that the Canadian economy is recovering from the soft patch seen in late 2018 and early 2019. Today's print adds some further upside to our 2.5 percent tracking for Q2 GDP”, said TD Economics in a research report.

At 15:00 GMT the FxWirePro's Hourly Strength Index of Canadian Dollar was bearish at -81.45 while the FxWirePro's Hourly Strength Index of US Dollar was neutral at -25.06 more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex