CAD: Setting up for retail sales (December) and CPI (January) – TDS

By FXStreet Research Team at TDS, suggests that the Canadian market attention will be more keenly focused on December retail sales which will compete with the simultaneous release of January CPI.

Key Quotes

“In assessing the balance of risk for both releases, we are cognizant of a weaker-than expected retail sales print while core CPI could surprise to the upside in large part due to higher administrated prices.

Retail Sales: All of the factors that contributed to a stronger November print for retail sales will to conspire to pull December sales down by a forecasted -0.8% m/m. Auto sales finished the year on a softer footing and when excluded from the calculation will leave core retail sales down a more subdued 0.6%. Outside of autos, lower gasoline prices and a softer month for the housing market will contribute to more fatigue in overall spending.

The temporary lift to sales provided by Black Friday promotions is also expected to reverse which adds an additional weight on headline sales. Turning to the volumes metric, the seasonally adjusted CPI series showed a modest 0.1% monthly advance which suggests a slightly larger decline in retail volumes of between 0.9-1.0%. For industry-level real GDP, retail volumes are expected to …read more

Source:: FX Street