Canada Core Retail Sales m/m Forecasted Potential Impact on CAD

Canada Core Retail Sales m/m Forecasted Potential Impact on CAD

Statistics Canada is expected to release the Core Retail Sales m/m report today at 13:30 GMT, focusing on month-over-month changes in retail sales, excluding automotive and spare parts. This month's data forecast is a 0.6% increase. This follows a negative figure, at -0.7% in the previous month.

Core retail sales are an important barometer of consumer spending: they measure changes in spending behavior through different retail segments. The report is closely watched because it helps unravel insights regarding consumer confidence and activity, two prime drivers of economic growth in Canada.

The success of the anticipated 0.6% increase may mean the consumer spending economy has returned to health and, therefore, better still economic momentum is in play. This outcome might support the CAD as a rise in retail sales bodes well for a healthy domestic economy. Should the results fall short of expectations or show another contraction, though, that might weigh on CAD, as weaker retail sales may raise concerns about slowing growth.

Ultimately, the release will prove useful, but that depends again on how the market reacts to the final figures and their comparison with expectations.

All eyes are on Fed Governor Bowman's speech tonight

 A speech by Federal Reserve Governor Michelle Bowman could give out some key information about the Fed's monetary policy ahead of the next FOMC meeting. Market players will listen to her rhetoric closely for any hints toward interest rate rises or cuts.

A hawkish speech by Governor Bowman would likely help the USD as hawkish comments are perceived as a sign of commitment to curb inflation with tighter monetary policy. Conversely, a dovish speech suggesting that there would be rate pause or cut may bring down USD.

This will be viewed by markets depending on the tone and details of her statement. Traders and investors will most likely also look for contextual clues on the Fed's general economic view that will go ahead to influence sentiment across various asset classes. Nevertheless, one will only have an idea of the end effect once this speech is delivered.