MNI DATA IMPACT: Canada Has Biggest Trade Surplus Since 2016>

By Greg Quinn

     Ottawa (MNI) - Canada recorded its biggest trade surplus in 

more than two years in May, smashing market expectations for a wider 

deficit.

     The surplus was C$0.76 billion compared with the MNI median 

economist prediction for a trade deficit of C$1.65 billion. It was the 

biggest trade surplus since November 2016 according to Ottawa-based 

Statistics Canada.

     Exports rose 4.6% to a record C$53.1 billion in May, with gains in 

nine of 11 major sectors. Passenger car and light truck shipments jumped 

by 18% following prolonged assembly plant shutdowns in April, and energy 

exports rose 5% in May.

     Imports grew by 1% in May. From a year earlier, exports have 

climbed 8.6% and imports by 1.1%.

     Canada's bilateral surplus with the U.S. grew to C$5.9 billion in 

May from C$4.4 billion in April, the biggest since October 2008.

     The massive strength in exports is sure to make it easier for the 

Bank of Canada to maintain a neutral stance on interest rates at its 

July 10 meeting as other central banks move towards fresh stimulus. The 

strength in foreign trade will add to economic growth already expected 

to top a 2% annualized pace in the second quarter, adding to momentum in 

consumer spending.

     Exports have climbed by 15% since December, another sign of a 

broad-based economic expansion. 

     Unlike some past reports, the gains weren't exaggerated by higher 

prices. Exports in volume terms rose 4% and imports by 1.2% in May.

--MNI Ottawa Bureau; greg.quinn@marketnews.com

[TOPICS: M$C$$$,MACDS$]