Canada's exports increased contrasts with the weakening global economic trend.

The Canadian dollar has weakened since the beginning of the week by more than 1.37 against the US dollar, even though the US dollar had depreciated the previous week as the Fed indicated that it was too early to push for interest rate hikes. Additionally, continuously declining oil prices have also impacted the Canadian dollar since Canada's major exports are petroleum-related products.

However, on the past Tuesday, China announced an increase in imports, which is a positive development, but it's just one of the state-supported measures, and the domestic manufacturing sector remains weak, compared to previous years. Therefore, China's increased imports may only have a short-term impact.

Canada has a trade surplus of 2 billion Canadian dollars in September, which is higher than the market's expectations of 1 billion Canadian dollars, with increased exports outpacing imports. Imports increased by 1.0% to 64.99 billion Canadian dollars, mainly driven by imports of consumer goods and automotive parts, with an increase in imports from the United States by 1.7%, while imports from other countries decreased slightly.

On the export side, Canada saw a 2.7% increase to 67.03 billion Canadian dollars, with energy products remaining a significant portion of the exports. Despite the decrease in oil prices, the weak Canadian dollar is another factor contributing to the trade surplus. Additionally, there was a significant increase in the export of wheat, up by 56.1%, indicating that the Russia-Ukraine conflict continues to affect global food supplies. Conversely, exports of metal and non-metallic mineral products decreased.

The unemployment rate in Canada increased to 5.7% in October from 5.5% the previous month, which is attributed to the continuous interest rate hikes by the Bank of Canada. This has raised the cost of goods and weakened the labor market, with an additional 40,300 people becoming unemployed, bringing the total to 1,229,400. Furthermore, 60.1% of the unemployed have been out of work for more than a month, indicating the difficulty in finding employment due to increased cost pressures.

The yield on Canada's 10-year government bonds has decreased to 3.7%, mirroring the rapid decline in yields in the United States. The rising unemployment rate, slowing wage growth, and decreasing general and core inflation rates in the country have led to expectations that the Bank of Canada will keep interest rates steady in its next meeting.

Techical analysis data (5H)

Resistance: 1.3779, 1.3787, 1.3799

Support: 1.3759, 1.3747, 1.3739

Source: Investing.com