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.)