Canada: Retail Sales forecasted to rise by 0.1% m/m in July - TDS
|Canadian retail sales are forecast to rise by 0.1% m/m in July while weaker motor vehicle spending should leave the exautos measure up 0.3% on the month, according to analysts at TDS.
Key Quotes
“Last month's report showed that the slowdown in the Toronto housing market has weighed on big ticket purchases by local residents, and we expect this regional underperformance to continue into July. Outside of the Toronto region, labour market gains and elevated consumer confidence should continue to drive spending and sesquicentennial Canada Day celebrations could add to general merchandise and food and beverage sales. Meanwhile, the increase in consumer prices should see real retail sales underperform the nominal print. Given the solid handoff from June and a stabilization in the Toronto housing market, we think that household spending will remain one of the prominent drivers of growth in Q3 but expect PCE to moderate from the 4.6% advance in Q2.”
“Foreign Exchange
Following Lane’s comments, markets are becoming more wary of the BoC’s rate path and thus are likely to be more sensitive to downside surprises in the data. As such, we view the market reaction as asymmetric. Downside risks to the CPI figure balanced by any further upside surprise in retail sales from wealth effects suggest a modest lift to CAD as markets focus more on the retail sales report. Disappointment in both, however, would be to the detriment of rate hike expectations and CAD.”
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