Data released in Canada on Friday showed retail sales rose 2.2% in May surpassing expectations of a 1.6% gain. Analysts at the National Bank of Canada point out sales were pushed up at gasoline stations and motor vehicle/parts dealers. They consider a strong labor market will compensate higher prices and rising interest rates.
Key Quotes:
“Consumer expenditures on goods came out better than expected although the prior month observed a small downward revision. The May print was pushed up by sales at gasoline stations and motor vehicle/parts dealers.”
“The remainder of the retail sales report was not too shabby as witnessed by core retail sales (ex. autos/gas) which increased 0.6% in May, a fifth consecutive monthly increase. The national diffusion of retail sales was also a bright spot of the report as all provinces reported gains in the month.”
“There was some optimism to be found by the increase in volume retail sales which rose 0.4% in the month. Including the rise in the previous month, real retail spending increased 2.1% annualized in the second quarter of the year assuming growth is flat in June. The Statistics Canada preliminary estimate for June suggests a 0.3% increase in nominal sales.”
“While gas receipts should support nominal retail sales with rising gasoline prices in June, there could be a reduction in spending in other sectors as consumers deal with higher prices and rising interest rates. Hopefully these headwinds are compensated by a strong labour market and a still high savings rate.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD keeps range near 1.0650 ahead of German IFO survey
EUR/USD is keeping its range play intact near 1.0650 in the early European hours on Monday. Markets stay risk-averse, weighing the Fed's 'higher-for-longer' rate view and lingering China's property market woes. Germany's IFO survey eyed.
GBP/USD remains on the defensive below the 1.2250
GBP/USD remains on the defensive below the mid-1.2200s early Monday. The US Dollar is clinging to the previous week's gains alongside firmer US Treasury bond yields while the Pound Sterling weighs the Fed-BoE policy divergence amid a quiet calendar.
Gold remains on the defensive below $1,940 amid the Fed’s hawkish stance
Gold price (XAU/USD) loses momentum around $1,920 during the early European session on Monday. Meanwhile, the US Dollar Index (DXY) attracts some buyers and hovers around 105.60, near the highest level since March 2023.
Ethereum whales prepare ahead of futures Ethereum ETF approval on October 2
Ethereum price is likely going to witness a massive spike in volatility soon due to the circumstances surrounding the approval of the token’s futures Exchange-Traded Fund (ETF). According to Twitter users, the ETF is likely going to be approved on October 2.
Is inflation falling further?
A first flash estimate of Eurozone inflation in September is expected. In August, inflation fell slightly to 5.2%. While the downward pressure from energy prices has eased slightly, the momentum of food prices has continued to decline.