TD Securities’ Global Strategy Team highlights upcoming Canadian economic data, including the International Merchandise Trade and Payroll Employment Change. The trade deficit is expected to edge lower to $1.0 billion in November, influenced by headwinds in export activity. Additionally, the Bank of Canada held rates steady at 2.25% but adopted a dovish tone amid heightened uncertainty.
Canadian economic outlook and data releases
« We look for the international merchandise trade deficit to edge lower to $1.0bn in November from the -$0.6bn deficit in October (market: -$0.70bn), reflecting new headwinds to export activity. Softer motor vehicle production will weigh on exports after driving a sharp pullback in manufacturing shipments, while the 1.5% m/m decline for hours worked in manufacturing speaks to broader headwinds across the sector. »
« The Bank of Canada held rates unchanged at 2.25% in January, but the policy statement took a more dovish tone with an emphasis on heightened uncertainty. There was a large mark to market upgrade on 2025 GDP in the January MPR, but 2026 growth forecasts were unchanged despite new fiscal support. »
« We continue to look for the Bank to stay on hold through 2026, and while we believe the next move will be a hike in 2027Q1, we also believe near-term risks skew dovish. »
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)