Retail sales report will do little to change narrative around BoC hikes - TD Securities

Eren Sengezer FXStreet

"Retail sales fell by 0.1% in December to outperform expectations for a more significant decline. Gasoline prices had a disproportionate impact which left real retail sales up 0.2%," TD Securities strategists Andrew Kelvin and Robert Both said assessing today's retail sales report from Canada.

Key quotes

"This report will do little to change the narrative around BoC hikes - we are still tracking Q4 growth at 0.9% (BoC: 1.3%) and the Bank will still need confirmation of a rebound in business investment before moving off the sidelines."

"Rates: Markets mostly looked past the better than expected retail sales gigures, and the pervading sense of pessimism around the Canadian economy is too entrenched to be revised away following one or two modest upside surprises."

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

EUR/USD looks weak below 1.1800

EUR/USD has slipped back under pressure, breaking through the 1.1800 support and drifting towards the weekly lows near 1.1770 ahead of the opening bell in Asia. The move reflects renewed strength in the US Dollar, with steady geopolitical tensions keeping its demand firm. Moving forward, the release of the German labour market report and flash inflation figures should keep European investors entertained on Friday.

GBP/USD threatens the 200-day SMA near 1.3440

GBP/USD rapidly leaves behind Wednesday’s strong advance, coming under heavy pressure and retesting the 1.3440 zone, where the critical 200-day SMA is located. Cable’s deep pullback follows the strong gains in the Greenback, while investors continue to pencil in a potential BoE rate cut in March.

Gold trims gains, slips back to around $5,170

Gold is now facing some downside pressure, hovering around the $5,170 region on Thursday. The yellow metal surrenders part of its earlier gains on the back of the resurgence of the buying interest in the Greenback. In the meantime, geopolitical tensions in the Middle East continue to limit the downside potential for now.