Canadian trade deficit narrows slightly in March

Canadian international trade deficit narrowed in the month of March. The trade deficit narrowed to CAD 3.2 billion from February’s revised CAD 3.4 billion. This was higher than consensus expectations of a deficit of CAD 2.4 billion. Exports grew 3.2 percent to CAD 49 billion, whereas imports were up 2.5 percent. In terms of volumes, exports grew 2.6 percent, while imports were up 1.3 percent.

Exports recorded a comparatively widespread recovery, rising in 9 categories out of 11. Nominal energy exports grew 7.7 percent, with crude oil volumes recording an encouraging 3.1 percent gain after falling in February. Stripping energy products, exports rose 2.1 percent. Meanwhile, other categories that added to the recovery include motor vehicles and parts and basic and industrial chemical products. Metal ores and non-metallic minerals and metal and non-metallic mineral products provided some offset.

The rise in imports were comparatively widespread as well. Out of 11 categories, 8 recorded growth. Particularly notable was a solid rise in imports of consumer goods, motor vehicles and parts, and industrial machinery and equipment. Imports of energy products also rose 4 percent. A large fall in the volatile aircraft and other transportation equipment category provided some offset.

The recovery in consumer-related and M&E imports is a positive sign for domestic demand, said TD Economics in a research report. The positive report provides a decent and encouraging handoff to the second quarter.

“For Q1, however, the release leaves our GDP tracking unchanged near 0.6 percent, largely due to the downward revisions for the prior month. The key message remains that the Canadian economy has hit a soft patch in the first quarter of 2019”, added TD Economics.

At 13:00 GMT the FxWirePro's Hourly Strength Index of Canadian Dollar was neutral at -45.4102 while the FxWirePro's Hourly Strength Index of US Dollar was neutral at 11.1306 more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex