Canada's May retail sales to show a modest rebound from April

Canada's retail sales for the month of May should show a modest rebound from a soft print in April, and a +0.2% m/m print is expected on headline as a small drop in vehicle sales should drag on the overall level of retail activity after new car sales fell by roughly 1% from very strong levels in April.

"We're expecting better things from retail sales ex-vehicles, which we think could rise by +0.3% m/m after a -0.6% m/m print in April," says Scotiabank.

The weak outcome in April, however, will not entirely be prone to a base-effect-fueled bounce as it was largely driven by the shut-down of a large electronics retailer, which leads to believe that the recovery in cumulative sales will play out over a number of months and not simply spring back all at once. The latter factor also does lend support to the possibility of revisions to the prior month if there were perhaps sampling issues as a result of the closure.