Canada: January international merchandise trade likely to post a surplus of CAD0.6b – RBC CM

Analysts at RBC are slightly below consensus for today’s Canadian January international merchandise trade release, looking for a surplus of CAD0.6b (cons. CAD0.8b).

Key Quotes

“This would represent the third consecutive monthly surplus, with the moderation from December expected to be driven by exports dropping 0.6% after three straight monthly increases. Declining activity is expected to be short-lived, though, as the low value of the CAD combines with above-potential US growth to eventually return exports to positive growth.”

“The weak Canadian dollar is expected to contribute to January imports remaining flat. While initial support is located at 1.3388 and 1.3358, we stress that resistance at 1.3461 will have to be exceeded in order to sustain bullish momentum as the daily studies move to overbought levels.”