Skip to main content

Trade numbers for July

Interesting results this morning, since both Canada and the U.S. revealed their July merchandise trade.  Interseting because both numbers were positive, Both Canada and the U.S. saw a marked improvement of their trade balance.

Exports and imports
(Source: StatsCan)

For Canada its June trade balance of -$1.2 billion was reduced to -$0.7 billion for July, the result of exports rising by 2.2% (while imports only rose by 0.5%).  Looking into the numbers Canada’s trade performance is even better since volume rose by 4.1% - a 1.9% price decline reduced the upside numbers.  As for imports it was the opposite trend with price rises (0.9%), and volume was down 0.4%.  The Japan effect is now gone (trade is back to its pre March level), trade direction reverse towards the U.S. again.  Funny enough energy exports keep on falling (they were not part of the increase here) partly due to the forest fires here (thing of those as the equivalent of Hurricane in the Golf of Mexico) that halted production (also prices were slightly lower in July) that trend too has reversed.

Trade balance
(Source: StatsCan)

U.S. numbers were also very interesting

Exports increased and imports decreased. Exports are well above the pre-recession peak and up 15% compared to July 2010; imports are up about 13% compared to July 2010. The decline in the trade deficit was due to an increase in exports.   Now America has benefited from a weak currency (although this has come to an end (15% down in the past 12 months), so the future direction of its deficit (especially as exporters will be challenged) is hard to predict, especially if Europe is in real trouble now, it is hard to see how this trend can persist.  However, the likes of GS preach this trade performance to suggest that GDP growth in Q3/11 will be stronger in the U.S. (around 1.6%).

U.S. Trade Exports Imports
(Source: Calculated Risk)

Intersting time for both economies.  Big difference is that trade accounts for about 1/3 of Canada's GDP while the figure for the U.S. is around 10%.  


Popular posts from this blog

Trucker shortage? No a plan to allow driverless rigs

There are still articles on how America is running out of truckers -- and that its a huge problem, except its not a problem, if it was a problem salaries would rise to so that demand would clear. Trucking is one of those industry where the vast majority of participants are owner/operators and therefore free agents.

Salaries and cost are extremely well know, "industry" complains that there are not enough truckers, yet wages continue to fall... Therefore there are still too many truckers around, for if there was a shortage of supply prices would rise, and they don't.

What there is though is something different; there is a push to allow automatic rigs to "operate across the US", so to encourage the various authorities to allow self driving rigs you talk shortage and hope that politicians decided that "Well if people don't want to work, lets get robots to do the work" or words to that effect.

This has nothing to do with shortage of drivers, but every…

Every punter says oil prices are on the rise: Oil hits $48/bbl -- lowest since September 2016

What the hell?

How could this be, punters, advisors, investment bankers all agreed commodity prices  in general and oil prices in particular are on the rise...its a brave new era for producers and exporters -- finally the world is back and demand is going through the roof, except not so much!

What happened?  Well energy is complicated, the world operates in a balance -- 30 days of physical reserves is about all we've got (seriously) this is a just in time business.  So the long term trend always gets hit by short term variations.

Global production over the past 12 months has risen by somewhat less than 1.5% per annum.  As the world market changes production becomes less energy intensive (maybe), but the reality is that the world is growing more slowly -- America Q4 GDP growth was around 1.9% (annualized) Europe is going nowhere fast (the GDP growth in Germany is overshadowed by the lack of growth in France, Italy, Spain (lets say 27 Euro members generated a total GDP growth of 1.2…

Paying for research

This morning I was reading that CLSA -- since 2013 proudly owned by CITIC -- was shutting down its American equity research department -- 90 people will be affected!

Now the value of a lot of research is limited, that is not to say that all research is bad. In fact, I remember that GS's Asia Aerospace research was considered the bible for the sector.  Granted, there was little you could do with the research since the "buy" was for Chinese airlines...that were state owned.  Still it was a vey valuable tool in understanding the local dynamics.  It seems that the US has introduced new legislation that forces brokers to "sell" their research services!  Figures of $10,000 an hour have been mentioned...

Now, research can be sold many times; if GS has 5000/6000 clients they may sell the same research 300x or 400x (I exaggerate) but this is the key -- Those who buy the research are, I presume, prohibited from giving it away or selling it, at the same time the same rese…