Canada: Goods exchanges collapsed in April

Data released on Thursday in Canada showed the trade deficit rose more than expected in April, with a dramatic collapse of almost 30% in exports, to the lowest in ten years and imports fell 25%. According to National Bank of Canada analyst Jocelyn Paquet, “with luck”, April will mark the low point for trade as the economy gradually reopened in May but it that does not mean things will get back to normal soon.

Key Quotes:

“The measures put in place to contain the spread of the coronavirus took a heavy toll on international exchanges in April. Total trade (exports + imports) sank no less than 27.4% m/m, thanks to record pullbacks for both exports and imports. Unsurprisingly, Statistics Canada attributed these poor results to “production shutdowns in a number of manufacturing industries, falling energy prices, the closure of many retail stores and weaker demand due to physical distancing measures”.

“The auto sector has been hit particularly hard since the beginning of the crisis. Exports in that category have sunk from C$7.4 billion in Februay to just C$1.1 billion in April due to production shutdowns. Imports suffered a similar fate.”

“With luck, April will mark the low point for trade as the economy gradually reopened in May. That does not mean things will get back to normal soon. The surge in unemployement worldwide, coupled with permanent capacity destruction, is likely to crimp international trade for some time.”

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.