Canadian CPI inflation may have found a floor

Canada releases a raft of data (May CPI, April retail sales) on 19 June. US consumers have found renewed vigour lately after dismal spending activity earlier this year, and of interest will be whether their Canadian neighbours take the cue. Canada's Q1 retail sales were weak, dropping 0.4% q/q on a volume basis. 

Standard Chartered notes:

• We expect a 0.4% (nominal) gain in April (below consensus of 0.7%), from 0.7% in March, with some potential upside risks from car sales. 
  
  
• We see consumption remaining lacklustre in Q2, not strong enough to offset the likely drag from commodity-related investment (which may keep Q2 GDP growth negative). 
  
  
• We see May's CPI inflation unchanged at 0.8% y/y, in line with the consensus view. Barring big surprises, this combined data is unlikely to change the Bank of Canada outlook.