Canada’s retail sales likely to have grown moderately in May

Canada’s retail sales are expected to have grown moderately in May. According to a TD Economics research report, retail sales are likely to have risen by a moderate print of 0.3 percent on a sequential basis, led by a further rebound in motor vehicle sales. On the contrary to the U.S., any plateau in Canadian auto sales is yet to be seen in 2017 and there are indications that May might have been another record setting month.

This would help in countering a huge drag from lower gasoline prices and housing related purchases and will leave ex-auto sales 0.1 percent lower on the month, though volumes are likely to have performed better than the nominal print.

In Toronto, existing home sales dropped by about 25 percent in May after the introduction of new macroprudential regulations that should restrain demand for furniture and other household furnishings. Meanwhile, labor market gains are likely to continue to underpin household spending in the near-term before the combination of higher interest rates and a more tepid housing outlook introduce a healthy cooling to the retail sector over the second half of the year, added TD Economics.

At 23:00 GMT the FxWirePro's Hourly Strength Index of Canadian Dollar was neutral at 39.9589, while the FxWirePro's Hourly Strength Index of US Dollar was bearish at -94.3269. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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