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Data released today showed a surplus in Canada’s goods trade balance in June.  Kyle Dahms, an analyst at the National Bank of Canada, noted net exports expanded during the second quarter, despite a decline in exports and imports in June.

Key Quotes:

“The headline Canadian trade number came in better than expected in June as the merchandise trade balance remained in surplus territory for a second consecutive month (first time since 2016). However, the latest print showed a severe deterioration in two-way trade. Indeed, this was the worst one month decline for exports in 2 years and the poorest showing for imports since July 2017. Drilling down, exports of crude oil declined for the first time in 2019 on lower prices.”

“Still the June result for exports leaves shipment volumes on pace for a 14.7% annualized gain in Q2. This, combined with a 3.2% annualized sag in imports, should translate into a contribution to GDP growth from trade in the quarter.”

“This is consistent with our call for a GDP print of 3.0% in the second quarter of the year.”

“In real terms, exports decreased 2.2%, while imports fell 3.6%.”