Weekly Economic Update

For the week of May 22 – 25.

Canadian retail sales in March overall increased more than consensus expectations, rising 0.6 percent to $50.2 billion. The largest contributor to the retail sales jump was the new car dealers category, adding 0.74 percentage points. Excluding autos, sales actually declined by 0.2 percent. The largest downside contributor to retail sales was the gas stations category, subtracting 0.20 percentage points. E-commerce sales also jumped to $1.27 billion, rising 11.1 percent from a year earlier and represents 2.6 percent of total retail sales.

Canadian headline inflation came in as expected on a month-over-month basis at 0.3 percent in April. The year-over-year basis fell short of the 2.3 percent expected increase, sitting at 2.2 percent. Meanwhile, two of the three core measures increased, while the ‘common’ component remained steady at 1.9 percent. The average core components are currently at 2.03 percent, up from March’s 1.97 percent revised average.

The slight miss on year-over-year inflation had traders moving the loonie down by over 0.5 percent on Friday, but the loonie has bounced back since late yesterday. Today’s expected trading range is 1.2717 – 1.2817.

Scheduled economic releases this week for Canada are limited to wholesale trade sales, and Bloomberg Nanos Confidence. Scheduled economic releases this week for US include various manufacturing data, new and existing home sales, the FOMC meeting minutes for the May 2nd meeting, and the final May print of the University of Michigan’s sentiment gauge.

Source: Bloomberg

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