Canadian retail sales likely to have moderated in March – TD Economics

Canadian retail sales data for the month of March is set to be released tomorrow. According to a TD Economics research report, retail sales are expected to have grown just 0.2 percent as a pullback in motor vehicle sales counters a recovery in ex-autos after a disappointing flat print in March.

Cold weather might be a drag on auto sales in March along with the shaky housing market, which introduces uncertainty around the durability of wealth effects. In the meantime, gasoline station sales would make a positive contribution on the sharp rise in the price at the pump, a dynamic that would be a drag on real incomes in the coming months.

“We expect real retail sales to remain largely unchanged on the month, which would leave volumes down for Q1 after sales cratered into year-end. Thus, the decline is due largely to a poor hand-off from Q4 and we would note that retail sales only account for roughly 45 percent of household spending, allowing some divergence against national accounts data”, added TD Economics.

At 20:00 GMT the FxWirePro's Hourly Strength Index of Canadian Dollar was highly bullish at 137.894, while the FxWirePro's Hourly Strength Index of US Dollar was bullish at 83.876. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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