Canada: Downside surprise on inflation and retail sales - TDS

Sandeep Kanihama FXStreet Contributor

Canada’s headline inflation fell to 2.2% y/y in September, well below the consensus for 2.7% and down 0.4% on the month, notes the research team at TD Securities.

Key Quotes

“This accompanied a drift lower in measures of core inflation to 2.0% on average.”

“Retail sales also surprised to the downside at -0.1% m/m and fell 0.3% on a volumes basis. This will act as a headwind to industry-level growth in August although we still track Q3 growth above BoC projections at 2.1%.”

“FX: CAD has benefited from both positioning and the sell-off in rates the past few months. This release pours some cold water on the optimism, especially since much of the good news has been priced in.”

Author

Sandeep Kanihama

FXStreet Contributor

Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.

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