Canada wholesale sales register surprise decline in September on weak demand for machine tools

Wholesale sales in Canada posted a surprise decline during the month of September, following weakness in demand for machine tools and equipments that disappointed sellers at the start of the fourth quarter.

Canadian wholesale sales declined 1.2 percent in September compared with expectations of a 0.3 percent increase for the month and followed a 0.8 percent gain the previous month, data released by Statistics Canada showed Monday. The annual increase slowed to 2.8 percent while, in volume terms, there was a 2.6 percent annual increase after a 1.5 percent monthly decline.

Further, there was a decline in five of the seven subsectors for the month accounting for 65 percent of overall sales. There was a 1.1 percent decline in food sales with a 1.7 percent annual increase. There was also a sharp decline in machinery sales of 4.0 percent to give a 1.6 percent annual decline and the lowest rate since April. There was also a sharp 3.1 percent decline in the miscellaneous subsector.

However, motor vehicle and parts advanced 0.7 percent on the month with a 13.4 percent increase over the year. Wholesale inventories increased 0.2 percent for the month, the second successive increase, and the inventory/sales ratio rose from 1.29 from 1.27 the previous month. Inventories were, however, still lower by 0.3 percent compared with September 2015.

Meanwhile, USD/CAD is trading 0.11 percent down at 1.34, while at 5:00GMT, the FxWirePro's Hourly CAD Strength Index remained highly bullish at 81.53 (higher than the 75 benchmark for bullish trend). For more details, visit http://www.fxwirepro.com/currencyindex