• Canadian retail sales rebound strongly in may

    Source: FxWire Pro - Commentary / 20 Jul 2018 13:15:37   America/New_York

    Canada’s retail sales rebounded strongly in May. On sequential basis, retail sales rose 2 percent, after falling 0.9 percent in the prior month. According to Statistics Canada, this is linked to inclement weather in several parts of the country. The sales rise was all because of more goods being sold, as constant-dollar sales also rose 2 percent.

    The growth was greatly a function of a rebound of motor vehicle and parts sales and gasoline stations. Nominal sales excluding these categories also rose 0.9 percent. Most trade categories saw sales rising in May, with the exception of the sizeable food and beverage category, where sales dropped 2.1 percent on softness at supermarkets. E-commerce sales rose 16.9 percent year-on-year, more than tripling the 5.5 percent yearly rate marked by overall sales. Region wise, Quebec and Ontario did the heavy lifting, although sales rose in most provinces.

    The May thaw appears to have not only hit April’s ice, but also consumers’ wallets. A recovery was to be anticipated given the effects of weather that kept some Canadians at home in April, but the jump in May more than made up for this set-back. The six month trend in this indicator is effectively consistent with its long-run average, while the trend in volumes is effectively flat.

    “Still, the strong showing in May sends our Q2 real GDP tracking to a robust 2.9% – basically in line with the Bank of Canada's most recent forecast. To that end, the fact that consumer spending on cars remains healthy despite rising borrowing costs suggests that the tightening cycle still has lots of room to run”, stated TD Economics in a research report.

    At 16:00 GMT the FxWirePro's Hourly Strength Index of Canadian Dollar was highly bearish at -120.62, while the FxWirePro's Hourly Strength Index of US Dollar was highly bearish at -121.982. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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