Analyst Takes On October Merchandise Trade Report

Mixed takes, with only CIBC pointing to the potentially weaker implications for domestic demand from lower import volumes.

• BMO: The merchandise trade surplus widened in October, with a weaker CAD providing a helping hand. Still, trade volumes look to have added to growth in the month.
• CIBC: Exports continue to benefit from strong demand for Canada's resources, although the slowing global economy could be starting to weigh on other areas of trade. A second consecutive decline in import volumes means that net trade will likely be a big positive contributor to growth again in Q4, although it is likely a poor sign for domestic demand and further evidence that higher interest rates are starting to bite the economy.
• National: The trade balance remained in positive territory for the tenth time in the past year. The increase in imports stemmed in part from motor vehicles/parts with a depreciation in the exchange rate contributing to higher import values. ToT slightly moderated from their Sept level but remain high on a historical basis although lower energy prices in Nov could impact trade.