Canada: Economy still on shaky ground – Westpac

Canada can’t seem to shake off an all pervading sense of malaise as the jobs data has stabilised but gains are concentrated in the part time area, trade data has improved too but it’s mostly driven by valuation gains from higher energy prices suggests Richard Franulovich, Research Analyst at Westpac.

Key Quotes

“The long hoped for uptick in non- energy investment and exports is not yet apparent.”

“But a genuine floor for Canada’s terms of trade thanks to the OPEC/non-OPEC deal, giving a solid boost to national incomes while the “Trudeau/Trump” onetwo fiscal punch has barely begun. All told, the risks for Canada in 2017 remain to the upside.” 

“USD/CAD probably holds above 1.3000, even if oil prices remain solid but CAD can see more sustained gains on key crosses, notably vs EUR and JPY.”