Canadian retail sales likely to have dropped in June, says TD Economics

Canadian retail sales are likely to have dropped in June. According to a TD Economics research report, the nation’s retail sales are expected to have risen 0.4 percent after several upbeat retail reports. Gasoline station sales are expected to serve as the main catalyst for the pullback after another decline in the price at the pump, while motor vehicle sales might see an incremental gain from record levels.

This should leave ex-auto sales weaker at -0.6 percent sequentially, though much of that is driven by the decline in gasoline sales, stated TD Economics. Wider measures of retail sales are likely to witness some change though household furnishings are expected to have dropped from May, owing to the deceleration in the Toronto housing market.

But this is unlikely to have a wider spillover to total retail sales given its isolated geographical impact and the fact that measures of consumer sentiment have stayed positive. As seasonally adjusted consumer prices were unchanged in June, real retail sales are expected to come in near the nominal print, added TD Economics.

At 20:00 GMT the FxWirePro's Hourly Strength Index of Canadian Dollar was slightly bullish at 70.4612, while the FxWirePro's Hourly Strength Index of US Dollar was slightly bearish at -71.638. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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