United States Tariff front-running continued to boost exports in January, as Canada's trade surplus rose sharply to C$4.0 billion, noted CIBC follwing Thursday's data.

That's the highest surplus seen since mid-2022 and was well above the consensus expectation of C$1.3 billion, said the bank.

Exports surged to a record level, with a 6% month-over-month overall increase, and shipments to the U.S. rose by 8%. That reflected gains in the auto sector and energy products, with higher oil prices contributing, stated CIBC.

Imports were up by 2% month over month and the depreciation in the Canadian dollar also helped to boost the trade figures, pointed out the bank.

In volume terms, exports rose by a "lofty" 4.5% month over month, following a 2.6% increase in December, and import volumes were up by 1.5%.

This represents a very strong start to the quarter but clearly the momentum won't be maintained with the imposition of U.S. tariffs, added CIBC.