CIBC Says Bond Yields Rise Slightly After Canada's Merchandise Trade Swings to Deficit

10:44 AM EST, 01/08/2026 (MT Newswires) -- Canada's trade balance moved back into deficit in October, although the $600 million shortfall wasn't as bad as the $1.5 billion deficit expected by the consensus, said CIBC.

That reflected a 3.4% month-over-month rebound in imports and a 2.1% month-over-month rise in exports, noted the bank after Thursday's data release. In volume terms, imports increased by 2.8% month over month and exports rose by 1.7%.

There were modest revisions to the Q3 data, but the detail still confirms that net trade was a large positive contributor to growth in that quarter, something that appears to be reversing course in Q4, stated CIBC.

Indeed, Canadian exporters remain challenged by United States tariffs and uncertainty around CUSMA trade deal renegotiations, and likely won't see a sustained improvement in activity until that uncertainty fades further into 2026, according to the bank.

Bond yields rose slightly following the release due to the more modest deficit than expected and the limited revisions to the prior quarter's data that showed a big growth contribution from net trade remains in place, added CIBC.

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