-- Canada will release its international merchandise trade figures for March at 8:30 a.m. ET on Tuesday, said Bank of Montreal (BMO).
Canada's trade deficit looks to narrow to $3.0 billion in March, in the first look at the impact of the energy shock on the economy, noted the bank.
Exports are poised to jump sharply on higher energy prices and additional demand, given the closure of the Strait of Hormuz, stated BMO. Imports and non-energy exports will also likely rise, as highlighted by a positive manufacturing flash as autos continue to recover.
Although metal prices softened in the month, the additional uncertainty from the outbreak of the Middle East war could introduce further volatility in gold shipments, pointed out the bank. The risk is tilted toward a better balance, and will likely remain that way as long as activity through the Strait remains restricted.
That said, it's not all good news: the longer the war continues, the greater the hit to global demand for non-energy goods, which will offset some of the energy boost, according to BMO.
While CUSMA trade deal negotiations continue, Canada has announced some more tariff relief, mostly via favorable loans to producers and exporters of goods containing steel, aluminum, or copper.
While the US dollar (USD) index is little changed, the Canadian dollar (CAD or loonie) is a touch stronger at $1.361 (73.5 cents US) early Tuesday, according to the bank.