Canada June retail sales –0.3% vs -0.3% expected

• May was -0.8%
• Preliminary June was -0.3%
• Sales down 0.5% in Q2
• Preliminary July +0.6%
• Ex autos +0.3% vs -0.2% expected
• Prior ex-autos -1.3% (revised to -1.2%)
• Ex autos and gasoline +0.4% vs -1.4% prior

These are some good numbers from the Canadian consumer. The ex autos number for June is a surprise while the July preliminary reading is a big surprise, given some soft indications.

The drag in the June report was autos, which fell 2.1%, led by new cars at -2.9%. It’s part of the ongoing weight from high interest rates that’s also dragging down everything housing related.

Within core retail sales, the +0.4% rise was led by higher sales at food and beverage retailers (+1.2%), which were driven by supermarkets and other grocery retailers (except convenience
retailers) (+1.8%). Gains at beer, wine and liquor retailers (+0.4%)
and specialty food retailers (+0.5%) were offset by lower sales at
convenience retailers and vending machine operators (-1.9%).

The
largest decrease in core retail sales in June came from sporting goods,
hobby, musical instrument, book, and miscellaneous retailers (-0.8%).

Overall, I can’t see this as anything but good news and it should put to bed the idea of a 50 bps cut in September.

This article was written by Adam Button at www.forexlive.com.