Canada: Today’s retail sales report has limited implications on BoC’s next move – TD Securities



“June retail sales were broadly in line with consensus at -0.2%, with ex-auto sales down 0.1% m/m,” noted TD Securities analysts.

Key quotes

“Sales were 0.3% lower on a volumes basis which left our tracking for Q2 GDP unchanged at 3.5% after upward revisions to May.”

“This report has limited implications for the Bank of Canada ahead of next week’s more consequential GDP data. While that report will be released in the BoC’s blackout period, we will be watching Governor Poloz’s appearance at Jackson Hole on Saturday for any hints on near-term tightening.”

Rates: The data did not have much impact, and for the remainder of the week we expect CAD fixed income to largely follow Treasuries. Given recent widening in CA-US spreads, we are biased to see the Canadian front-end outperform versus Treasuries.

FX: CAD was little bothered with the retail print and focus shifts to Poloz’s Jackson Hole appearance this weekend. Unless he signals otherwise, we continue to prefer CAD weakness on the crosses.”

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