For the week of September 17 – 21.
Similar to Thursday’s consumer prices release, retail sales for the month of August in the United States missed expectations across the board. On a headline basis, sales grew by 0.1 percent, sitting below the expected 0.4 percent. After excluding autos and gas, sales still only grew by 0.2 percent, missing the expected growth of 0.5 percent. The apparel and clothing category were the main contributing factors for August’s weak performance. However, the upward revisions of July’s growth saved this month’s figures. Headline growth was revised upward from 0.5 to 0.7 percent, while measures (excluding autos and gas) were revised upward from 0.6 to 0.9 percent.
Canada’s scheduled data releases include manufacturing sales, retail sales, and consumer prices. As of now, manufacturing sales are expected to have posted growth of 1.0 percent for the month of July. These releases will likely give investors more clarity on the Bank of Canada’s interest rate hike on October 24 (currently being priced in at an 86 percent probability). Scheduled data releases in the United States include empire manufacturing, housing starts. and building permits.
Both the United States and Canada’s government yields are trading 1 to 2bps higher with S&P futures lower (-2.3). The Canadian dollar is extending last week’s gains vs. the US dollar this morning, ahead of an important deadline for a ratified Nafta agreement this month. Today’s expected range of Canadian dollar is 1.2971 – 1.3071.