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Today’s trade report from Canada showed the trade deficit narrowed more-than-expected to CAD960 million in August. Kyle Dahms, analyst at National Bank of Canada explains  that most of the rise in export reflected higher prices.

Key Quotes:

“Nominal exports rose 1.8% outpacing nominal imports which expanded at 1.0%.”  

“The trade surplus with the U.S. expanded from C$4.4 billion to C$4.9 billion.”

“In real terms, exports edged down 0.2%, while imports advanced 1.2%.”

“The Canadian trade numbers came in slightly better than expected in August but the particulars of the report were rather varied. The improvement in the trade balance stemmed from the exports side of the advance in two-way trade. Indeed, exports rose 1.8% in August following back to back declines in June and July (-5.3% and -0.8% respectively).”

“Most of the rise in August reflected higher prices, as real exports posted a marginal decrease in the month. In the past 12 months, international shipment volumes have progressed a tepid 2.2% compared to +6.0% at the same time last year.”

“After two months of data, trade looks set to have no impact on growth in the third quarter after having contributed no less than 1.2 percentage points to Q2’s GDP print, the most in 8 years.”