Oil may be dropping, but strip away energy, and Canada’s commodity index shows a rising trend.

“Current fundamentals are still supportive for resource names outside the energy sector, while also suggesting that demand is still working to rebalance the physical crude market,” says Nick Exarhos, director at CIBC World Markets, in a weekly economics report. He says his analysis holds despite the potential for global growth to slow in the second half of this year as the effects of previously instituted stimulus wane.

Investing in Canadian manufacturing could also prove fruitful. That’s because Canadian factory workers continue to be cheaper, when priced in U.S. dollars, than their American counterparts.

Read: What hard data say for the equities outlook

“The last time we saw this much of a spread between labour costs in manufacturing between the U.S. and Canada, domestic factories outpaced their U.S. cousins by 2 [percentage points] on year-on-year growth,” says Exarhos, though he adds there are looming threats to Canadian factories from larger-than-normal shutdowns in American auto production.

He further notes that outperformance in manufacturing is possible given Canada’s output is tracking about 2.5% growth on average over the last year, while U.S. output is flat. Canada’s real GDP for April will be released Friday.

“GDP growth will be underpinned by an increase in manufacturing activity,” as well as consumer spending and utilities output, says a weekly economics report by TD Bank. The bank forecasts a 0.2% monthly increase in industry-level growth consistent with Q2 growth near 3%, which leaves the Bank of Canada “comfortable with the sustainable performance in the wider economy as they look to remove the 2015 insurance cuts in the coming months, most likely in October.”

Read: Despite dovish data, BoC could move in 2017

Scotiabank says in its weekly economics report that it expects 0.3% monthly growth, given some of the higher-frequency tracking on the month that shows manufacturing shipment volumes up 0.5% month over month, hours worked up 0.3%, retail sales volumes up 0.3% and wholesale volumes up 0.7%.

Read: Are central banks too optimistic about growth?

Fixed income

The U.S. dollar could lose ground as other economies, like the Eurozone, strengthen and as weak inflationary pressures keeps long-end yields low.

Read: Global economic news: NAFTA, Brexit, and more

“Lacklustre inflationary pressures have contributed [to lower long-term rates] by having traders both question the pace of future rate hikes and require less compensation for the risk of higher inflation,” says Royce Mendes, director at CIBC World Markets. Don’t expect longer-end U.S. yields to reach their post-election highs, even if the Fed hikes rates again this year, he says.

Canada conducts a two-year bond auction on Wednesday, notes Scotiabank. “At 93 [basis points], the yield on Canada 2s is underpricing our forecast for hikes starting in October, with the risk of July, and leading to a cumulative movement of +75 [basis points] by Q2 of next year from an overnight rate starting point of 0.5%.”

Scotiabank reminds us that bond markets shut at 1:00 ET on Friday ahead of the Canada Day holiday.

Read the full reports by CIBC, TD Bank and Scotiabank.

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