CIBC Says Markets Ignore Canada's Widening Trade Deficit as Iran Conflict Remains The Focus

10:46 AM EDT, 03/12/2026 (MT Newswires) -- Markets didn't pay attention to poor Canadian trade data, as the Iran war developments continue to take center stage, said CIBC on Thursday.

On the data itself, CIBC noted the Canadian international trade deficit widened dramatically in January, but it said the details of the report were a little less negative than the headline suggested. The $3.65 billion deficit compared with the consensus expectation for a $1.1 billion shortfall, and the prior month's deficit of $1.3 billion. However, that was partly the result of retooling at auto plants that thwarted shipments, as well as distortions tied to the volatile gold category, stated CIBC.

While the data adds to evidence that the Canadian economy started 2026 on "shaky ground," real exports are likely to make up some lost ground ahead as auto plant retooling ends, CIBC added.

Beyond that, however, the renegotiation of the CUSMA trade deal remains important in order to maintain the United States tariff exemption, as sectors hit by U.S. tariffs are still seeing depressed export volumes, with little evidence of diversification being seen, said CIBC.

MT Newswires does not provide investment advice. Unauthorized reproduction is strictly prohibited.