Canada: Retail sales expected to rise a modest 0.2% - BMO CM

Canadian retail sales are expected to rise a modest 0.2% in May as a rebound in auto sales should support the headline, while activity ex. autos looks to be about flat, according to Benjamin Reitzes, Canadian Rates & Macro Strategist at BMO Capital Markets.

Key Quotes

“However, that masks firming underlying sales, as seasonally-adjusted gasoline prices fell heavily, weighing on both measures of sales. Consumer spending has been consistently solid for the past two years, and continued solid job gains point to ongoing strength. We’ll be watching to see if the new real estate regulations put in place in Ontario act as a bit of a dampener on any related activity—that’s a potential downside risk through the summer months for retail sales. With goods prices falling heavily in the month due to gasoline prices, look for volumes to see a solid gain.”