Canada trade preview
Canada trade preview: analysts expect a widening in the trade deficit, due Friday, to -C$1.3 B in June from -C$1.1 B in May. Exports are seen rising 0.5% m/m in June after the 1.3% gain in May. The loonie was sharply stronger against the U.S. dollar in June, which could restrain export growth. Also, energy prices fell in June, which could be a drag on export values. Imports are expected to grow 1.0% m/m in June following the 2.4% surge in May. Another gain in exports, even if growth is rather modest, would be supportive of Canada's economy. Of course it would not fully remove the uncertainty over trade that dogs Canada's growth outlook. The net result would be a report that does not offer any resistance to the widespread view that the Bank of Canada will hike another 25 bp this year. and our recent commentary "Canada Employment to Continue Expansion in July" for more on Friday's trade and employment reports.