CIBC Research discusses its reaction to today's advanced trade balance report and revised Q3 GDP print.
"The US trade deficit widened to $77.2b in October, from a downwardly revised prior month. A drop in exports (-0.6%) and a slight uptick in imports (0.1%) drove the widening, with a fall in auto and food exports accounting for the bulk of the weakness in exports. However, both wholesale and retail inventories increased by more than expected, which will offset the wider trade deficit in tracking GDP forecasts for Q4.
Separately, US Q3 GDP was unchanged from the advance estimate, but the details differed slightly. Consumption was revised lower, from 4% to a still-solid 3.6%, while business fixed investment was revised up from -0.3% to 1.4%. A positive revision to inventories meant that real final sales were softer than previously thought at 1.2%," CIBC notes.
"Overall, with today's figures roughly in line with expectations, market reaction should be limited," CIBC adds.