Nathan Janzen, the senior economist at the Royal Bank of Canada, notes that Canada’s trade balance narrowed to $1.0 billion in April as nominal exports rose 1.3% and imports declined 1.4%.

• “The improvement in the April trade balance was larger than expected, but the details were not as strong.  Export volumes jumped 1.1%, but a big chunk of that came from a 15% surge in exports of metal and non-metallic mineral products That reflected higher gold exports, an often-volatile component, that is not likely to be repeated going forward.
• A big 2.1% drop in import volumes helped make the net trade balance look better in April – and we continue to expect net trade will retrace about half of the large 4 percentage point drag on overall Q1 GDP growth in Q2.  But lower imports of electrical equipment and the continued retracement of a huge surge in aircraft imports in January also suggests that business investment spending in Q2 will retrace a big chunk of the 40% Q1 gain.
• Broader trends for exports still look relatively uninspiring, non-energy exports are still up only modestly from a year ago by our count.  That is not new, but the US-led escalation in global trade tensions over the last couple of months also leaves some downside risk.”