Canada: Retail sales likely to post an above-consensus 1.3% m/m rise – RBC CM

Research Team at RBC Capital Markets, suggests that today’s Canadian April retail sales report serves as the key domestic event risk of the week.

Key Quotes

“RBC is forecasting an above-consensus 1.3% m/m rise in the headline component (cons. 0.8%) to more than retrace a 1.0% decline in March as broad-based gains are expected amongst all the major sales components.

Motor vehicle sales are indicated to rise 2.8%, while nominal sales at gas stations are expected to post a 4.6% increase on the back of higher prices in the month. Excluding these two volatile components, core sales are projected to rise by a more modest 0.2% m/m, offsetting the 0.2% decline registered in March.

The volume of retail sales is expected to rise a robust 0.7% m/m driven by motor vehicle sales, though this will only partially retrace March’s 1.3% decline. While USD/CAD should respond to deviations from consensus, price moves may be muted ahead of Thursday’s UK referendum outcome. Support is located at 1.2763 and 1.2733 through the event risk, with resistance located at 1.2860 and 1.2909.”