Canada expands in January
Data this morning showed that the Canadian economy expanded in January, beating market expectations and fully offsetting the reported declines that were posted in November and December.
According to Stats Canada, Canada’s GDP increased +0.3% in January from the previous month to a seasonally adjusted C$1.95T. Market expectations were looking for a headline gain of +0.1%.
Canadian producer prices rose In February
Stats Canada also said that Canadian producer prices rose in February, mainly due to higher prices for energy and petroleum products.
Canada’s industrial product price index rose +0.3% in February, following the -0.3% decline in January. On a 12-month basis, the producer-price index was up +1.2%.
Note: The index measures the price manufacturers in Canada receive, it does reflect the final prices consumers pay for goods.
As for raw materials, prices paid by manufacturers in February rose +4.6%, following a revised +4.0% gain in the previous month. February’s increase was mostly because of higher prices for crude energy products. On a 12-month basis, prices for raw materials are down -0.6%.
Loonie takes off
Canada’s GDP headline print handily beat market expectations and with WTI back trading above the psychological $60 handle, is providing support for CAD.
Loonie bull’s brought CAD on the release which has taken USD ‘bulls’ by surprise. CAD is +0.65% higher at C$1.3346. Strong support for the USD appears around C$1.3325-30. Expect those long USD positions that have been caught off side to be a willing USD seller on upticks.