Canadian manufacturing sales likely to have fallen in June

Canada’s manufacturing sales are likely to have dropped in June. According to a TD Economics research report, the manufacturing sales are expected to have fallen 1.2 percent sequentially, though weaker factory prices should permit volumes to outperform the nominal print. Energy products and motor vehicles should act as the main drivers for the decline, with the former expected to record a large decline because of weaker crude prices, which bottomed towards the end of June, though export volumes dropped a bit.

Motor vehicle exports have dropped in June, coinciding with a decline in domestic production and further evidence that the market for U.S. auto sales has flattened. Aerospace shipments should give some offset but transportation is expected to make a negative contribution on net, stated Wells Fargo. Meanwhile, a fairly wide decline is expected as manufacturers adjust to the rising Canadian dollar, a headwind which will grow stronger in the third quarter.

“While our forecast would represent the largest drop since early 2016, it would still leave Q2 nominal shipments up almost 5% on an annualized quarterly basis”, added Wells Fargo.

At 22:00 GMT the FxWirePro's Hourly Strength Index of Canadian Dollar was slightly bullish at 65.4017, while the FxWirePro's Hourly Strength Index of US Dollar was bearish at -75.4199. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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