Recent analyses from Standard Chartered and TD Securities highlight the differing effects of higher oil prices on China and Canada. In China, Standard Chartered’s Hunter Chan and Shuang Ding report that robust external demand, particularly for AI and semiconductor-related products, is expected to support April industrial production and trade, with industrial production growth likely accelerating to 6.2% year-on-year and export growth to 12% year-on-year. Despite this, domestic demand remains soft, as evidenced by the services PMI falling below 50 and the construction PMI dropping to a six-year low of 48, indicating subdued housing market activity. Fixed asset investment growth is projected to remain stable at 1.6% year-on-year for the first four months of 2026, supported by equipment manufacturing and infrastructure investment. The analysts note that while policy measures have alleviated the pass-through of international energy price increases, China’s energy CPI inflation likely rose, offsetting a drop in food CPI and keeping headline CPI inflation at 1% year-on-year [1].
In contrast, TD Securities economists Robert Both and Emma Lawrence project that higher West Texas Intermediate (WTI) oil prices will sharply narrow Canada’s March international merchandise trade deficit to CAD 1.5 billion, down from CAD 5.75 billion the previous month. This improvement is attributed to a 40% month-on-month increase in WTI, which is expected to boost export activity, particularly in energy and autos. Non-energy exports are also anticipated to see modest gains, supported by increased auto production and stronger hours worked in manufacturing. However, the Canadian labor market remains subdued, with only a modest 5,000 employment gain expected in April, keeping the unemployment rate steady at 6.7%. Wage growth is forecast to ease to 4.8% year-on-year, down 0.3 percentage points, reflecting muted labor market momentum [2].
Both reports underscore the significant influence of rising oil prices on their respective economies, with China experiencing upward pressure on producer and energy consumer prices, and Canada benefiting from improved trade balances but facing ongoing labor market softness. Neither source provides forward-looking statements beyond the immediate data projections, nor do they include analyst opinions on longer-term market implications.
CONCLUSION
Higher oil prices are driving increased export activity and improved trade balances in both China and Canada, though domestic demand in China remains weak and Canada’s labor market shows limited momentum. Market sentiment is cautiously positive due to the export boost, but underlying economic softness tempers the outlook.