Canada: Government’s finances are in better shape – RBC CM

The federal government’s fall economic statement is expected to indicate that the government’s finances are in better shape than it projected in Budget 2017 thanks to a smaller‐than expected deficit in fiscal year 2016/17 and stronger economic growth in the current calendar year for Canadian economy, explains the analysis team at RBC Capital Markets.

Key Quotes

“Combining the better starting point from fiscal 2016/17 and  updated economic forecasts, we think the updated deficit  for fiscal year 2017/18 should fall somewhere in the $10‐20  billion range rather than $28.5 billion. Last week’s bullish breakout above 1.2558 targets 1.2663 initially, followed by 1.2778. Support is located at 1.2591 and 1.2534.”