Canada’s exports rose to $66.31B in February, up from $62.48B in the previous month.
The increase shows higher export values month on month, based on the reported totals.
This report on February’s exports shows unexpected strength in the Canadian economy. It suggests the Bank of Canada may delay any planned interest rate cuts. We should therefore look at options and futures that profit from rates remaining stable or higher.
This robust export demand directly supports the Canadian dollar. We see the potential for the loonie to strengthen against the US dollar, especially as Statistics Canada noted the surge was led by energy products with oil holding above $85 a barrel. Call options on the Canadian dollar expiring in the next 45 days offer a direct way to play this anticipated strength.
With core inflation still sticky around 2.9%, this strong economic data significantly reduces the probability of a Bank of Canada rate cut in the next quarter. We recall the concerns about slowing global demand throughout 2025, making this rebound particularly impactful for policy. Traders should consider selling near-term CORRA futures contracts to bet against an imminent rate cut.
This news is also bullish for Canadian equities, particularly the export-heavy S&P/TSX 60 index. The strength in commodity and manufacturing sectors should directly benefit major index components. We can express this view by buying call options on ETFs like XIU or through S&P/TSX 60 index futures for more direct leverage.
