From David Rosenberg:
Canada posted a very small surplus of $200 million, which was below the $600 million consensus estimate and again, two-way trade deflated with exports down 1% and imports down a sharper 2.2% (these are in nominal terms). In volume terms, imports were flat while exports fell 1.6% in what was the second contraction in the real trade balance in a row. Upside growth risks for Canadian Q2 GDP are subsiding — if fact, we are at 3.3% (annual rate) right now versus 3.6% as per the consensus and we believe the risks are to the downside, especially in light of the weak May housing data.
Bottom line is that Canada's economy is doing okK, internal demand is good, oil price around $75 is keeping the CAD near the 1.03/97 level (again the Petro-currency effect). But with 40% of the GDP depending on exports the signs are poor for export demand.
The Chinese numbers for May trade were excellent (up 48%) so we may be seeing a decoupling of the Asian economies (I wish) although in my heart I know that things just don't work out that way....Canada's dilemma is that all levels of governments have (rightly) undertaken economic tightening which will impact GDP growth. Q4 2009 and Q1 2010 were extremely strong, but already the numbers for Q2/2010 are looking more "iffy" we shall see.
In November 2009 my prediction was for Canada's GDP to grow by 3.2% in 2010, based on a number of factors (healthy financial sector, housing market strength, and raw material demand stable to strong). The first half of the year has more or less delivered to goods (steel, aluminum, copper are still relatively high). Still this is an illustration of the weakness of the recovery, that every Canada which has no suffered nearly as much as the other G7 countries, sees its GDP second half target growth probably around 1%.
Aside from that have a good weekend
Canada posted a very small surplus of $200 million, which was below the $600 million consensus estimate and again, two-way trade deflated with exports down 1% and imports down a sharper 2.2% (these are in nominal terms). In volume terms, imports were flat while exports fell 1.6% in what was the second contraction in the real trade balance in a row. Upside growth risks for Canadian Q2 GDP are subsiding — if fact, we are at 3.3% (annual rate) right now versus 3.6% as per the consensus and we believe the risks are to the downside, especially in light of the weak May housing data.
Bottom line is that Canada's economy is doing okK, internal demand is good, oil price around $75 is keeping the CAD near the 1.03/97 level (again the Petro-currency effect). But with 40% of the GDP depending on exports the signs are poor for export demand.
The Chinese numbers for May trade were excellent (up 48%) so we may be seeing a decoupling of the Asian economies (I wish) although in my heart I know that things just don't work out that way....Canada's dilemma is that all levels of governments have (rightly) undertaken economic tightening which will impact GDP growth. Q4 2009 and Q1 2010 were extremely strong, but already the numbers for Q2/2010 are looking more "iffy" we shall see.
In November 2009 my prediction was for Canada's GDP to grow by 3.2% in 2010, based on a number of factors (healthy financial sector, housing market strength, and raw material demand stable to strong). The first half of the year has more or less delivered to goods (steel, aluminum, copper are still relatively high). Still this is an illustration of the weakness of the recovery, that every Canada which has no suffered nearly as much as the other G7 countries, sees its GDP second half target growth probably around 1%.
Aside from that have a good weekend
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