Fourth quarter current account data from StatsCan:
- Q3 deficit was $16.21B (revised to $15.31B)
The deficit was slightly smaller than expected but there was a larger revision to the Q3 data.
Separately, the Canadian PPI report was released:
- Industrial product prices +0.5% vs 0.0% exp
- Prior -0.2% (revised to -0.3%)
- Raw materials price index -0.4% vs -3.3% exp
There is a danger that pass-through raw materials and import costs are going to restrain the Bank of Canada's ability to cut rates. You would expect them to look-through the declines due to the soft loonie and commodities but the inflation pressures may make them hesitate.