Canada: Retail Sales rise by 1.1% in April vs. 0.2% expected

• Retail Sales in Canada increased at a stronger pace than expected in April.
• New Housing Price Index rises 0.1% in May, first increase since August 2022. 
• USD/CAD remains around 1.3210/20, marginally lower for the day.

Statistics Canada reported on Wednesday that Retail Sales rose by 1.1% on a monthly basis in April. This reading came in higher than the market expectation for an increase of 0.2%.

“Core retail sales—which exclude gasoline stations and fuel vendors and motor vehicle and parts dealers—increased 1.5% in April.  In volume terms, retail sales increased 0.3% in April”, Statistics Canada noted in its publication. Excluding motor vehicle and parts dealers sales advanced 1.3%.   

"Statistics Canada is providing an advance estimate of retail sales, which suggests that sales increased 0.5% in May. Owing to its early nature, this figure will be revised. This unofficial estimate was calculated based on responses received from 40.6% of companies surveyed. The average final response rate for the survey over the previous 12 months was 89.2%."

A different report showed a “slight uptick in new home prices in Canada in May”. The New Housing Price Index increased 0.1% month over month in May, its first increase since August 2022, surpassing expectations of 0%. 

Market reaction

The USD/CAD remained steady, hovering around 1.3210/20 following the upbeat report. At the same time, Federal Reserve Chair Powell's speech was released and strengthened the US Dollar somewhat.