TD Securities economists Robert Both and Emma Lawrence project a sharp narrowing in Canada’s March international merchandise trade deficit to CAD 1.5 billion, driven by stronger exports on higher West Texas Intermediate (WTI) and autos. For April, they see a modest 5k employment gain, leaving unemployment at 6.7% and wages easing to 4.8% year-on-year, underscoring expectations for muted labour market momentum.

Trade gap narrows, jobs stay soft

"International trade for March will give an early look at the impact of higher oil prices on Q1 growth when released Tuesday, with TD looking for a sharp improvement to a $1.5bn deficit."

"We look for a sharp improvement in the international merchandise trade balance for March with a $1.5bn deficit, down from $5.75bn the prior month, on a sharp increase in export activity."

"Higher energy prices will provide the main catalyst for exports after a 40% m/m move in WTI, while non-energy exports see more modest gains underpinned by further increases to monthly auto production and stronger hours worked across the manufacturing sector."

"April with employment rising by 5k to build on the 14k jobs added in March."

"A 5k increase in April would keep the unemployment rate stable at 6.7%, while wage growth is forecast to slow by 0.3pp to a still-elevated 4.8% y/y."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)