Canada: Trade surplus expected to narrow modestly to $750 mln in January – BMO CM

Benjamin Reitzes, Senior Economist at BMO Capital Markets, expects Canada’s trade surplus is expected to narrow modestly to $750 mln in January and will mark the third straight monthly surplus, which would be the best streak since oil prices collapsed in 2014.

Key Quotes

“Oil prices ticked modestly higher in January (in C$ terms), though a pullback in natural gas after surging in December will restrain energy exports. The Canadian dollar was slightly firmer in the month, but not enough to meaningfully impact trade. Imports look to rise modestly as well in the month, though the trend remains relatively steady over the past year. We’ll be watching non-energy export volumes closely as usual, as they’ve fallen in 3 of the past 4 months. After adding bigly to Q4 GDP, we’re expecting a more neutral or slightly negative impact on Q1 growth.”