Reuters (12/5, Ljungrren) reports that Statistics Canada announced Tuesday that Canadian exports grew in October for the first time since May, and, “as a result, Canada’s trade deficit shrank to a five-month low of C$1.47 billion ($1.17 billion) from C$3.36 billion in September.” Data showed a 2.7% growth in exports, “the biggest month-on-month increase since March,” which was attributed “in part due to higher shipments of energy products to the United States to make up for a recent drawdown in refinery inventories.”
Bloomberg News (12/5, Argitis) reports that the gains were “driven largely by a jump in sales to the country’s biggest trading partner,” the United States, and the export increases “halved the trade deficit to C$1.5 billion ($1.2 billion), below economist forecasts for a C$2.7 billion deficit.” Bloomberg characterized the report as “unexpected strength for a trade sector that has been a great disappointment to policy makers this year, hampering an economy that is otherwise firing on all cylinders.”
Bank of Canada to Hold Steady on Interest Rates
Bloomberg News (12/5, Argitis) reports, “Governor Stephen Poloz is expected to stay on hold at his last interest-rate decision of 2017, capping a year that saw the Bank of Canada start the delicate process of raising borrowing costs to more normal levels.” Poloz’s announcement on rates will come at 10am Wednesday morning, and, “only four of 26 economists surveyed by Bloomberg News expect Poloz to increase his 1 percent benchmark rate, with all major Canadian banks expecting a pause.”
Bloomberg adds that the Bank of Canada, which has raised rates twice this year, is “handling the normalization of policy very carefully,” maintaining that “interest rates are still a full 2 percentage points below what they would consider ‘neutral.’” However, the bank “is wary of raising borrowing costs too quickly for fear of inadvertently triggering another downturn.”
The Wall Street Journal (12/5, Vieira, Subscription Publication) also reports.