Retail spending in Canada is expected to increase for the third consecutive month in March as economists forecast domestic demands to to rise 0.5% from February however, fears of deepening downturn paired with fading demands for employment could weigh on households as the Bank of Canada lowers its outlook for future growth.
Trading the News: Canadian Retail Sales
What’s Expected
Time of release: 05/22/2009 12:30 GMT, 08:30 EST
Primary Pair Impact : USDCAD
Expected: 0.5%
Previous: 0.2%
Effect the Canadian Retail Sales had on USDCAD for the past 2 months
| Period | Data Released | Estimate | Actual | Pips Change (1 Hour post event ) | Pips Change (End of Day post event) |
| Feb 2009 | 04/23/2009 12:30 GMT | -0.3% | 0.2% | +23 | -117 |
| Jan 2008 | 03/20/2009 12:30 GMT | 1.0% | 1.9% | +42 | +59 |
February 2009 Canada Retail Sales
| Retail sales in Canada rose for the second consecutive month in February as household consumption unexpectedly increased 0.2% from the previous month, while sales excluding autos beat expectations for a 0.2% rise as the index jumped 0.6% from January. A deeper look at the report showed building supplies led the advance as demands surged 3.0% during the month, which was followed by a 1.7% increase in gasoline receipts, while discretionary spending on food and drinks grew 0.7% from January. The data encourages an improved outlook for the world’s eighth largest economy as the Bank of Canada pledges to hold the benchmark interest rate at the record low for more than a year to stimulate the economy however, as the central bank lowers its growth forecast and expects the annual rate of growth to contract 3.0% this year, conditions are likely to get worse as households face a weakening labor market. | |
January 2008 Canada Retail Sales
| Private-sector spending in Canada rose for the first time in four-months, and marked the biggest increase since July 2006 as retail sales jumped 1.9% in January. The breakdown of the report showed that auto-related purchases increased 3.8% from the previous month, while discretionary spending on clothing and accessories rose 3.0% however, households are likely to cut back on consumption throughout the year as the region faces its first recession in over a decade. As a result, the Bank of Canada took further steps to stimulate the ailing economy and lowered the benchmark interest rate to a record-low of 0.50% earlier this month, and the extraordinary efforts should help to stem the downside risks for growth and inflation but nevertheless, as the downturn in the global economy intensifies, growth prospects are likely to deteriorate further as trade conditions falter. | |
What To Look For Before The Release
Traders with access to market depth information via the FXCM Active Trader Platform may use it to gauge the potency of the economic data release as well as to shed some light on the market’s directional bias. Increasing volume ahead of the announcement will telegraph likely follow-through behind whatever move is to materialize, while an imbalance in available liquidity on the Bid versus the Offer side of the market will tell us the direction major institutions are likely favoring ahead of the announcement:
| Bullish Scenario:
If we see substantially deeper available liquidity on the Bid side of the market, this tells us that major price providers in the market are looking to buy the CAD against the US Dollar. Considering that close to 60% of all FX market volume is cleared through just six top banks, we see it prudent to be on the same side of the trade as major institutions and will favor a bullish bias on USDCAD ahead of the data release. | Bearish Scenario: |
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How To Trade This Event Risk
Retail spending in Canada is expected to increase for the third consecutive month in March as economists forecast domestic demands to to rise 0.5% from February however, fears of deepening downturn paired with fading demands for employment could weigh on households as the Bank of Canada lowers its outlook for future growth. The leading economic indicator for the region fell for the eighth consecutive month in April as housing starts grew at its slowest pace since 1996, while home prices continued to tumble lower during the same period, and the data reinforces a dovish outlook for future policy as e
