Softer Canadian February and March retail sales numbers highlight the pain from higher interest rates that’s slowly working its way through the economy. Statistics Canada reported sales down 0.1% in February and flat in March.
USDCAD 10 mins
The market implies roughly a 55% chance of a June 5 Bank of Canada rate cut, rising from just below 50% before the data. The BOC has plenty of time to digest more economic news ahead of that decision, including another retail sales report.
At the moment, USD/CAD is fighting to get above yesterday’s high of 1.3714. So far it has been matched but not broken. A run higher could target 1.3750 but it will depend on the broader risk mood. Currently, US equity futures are up fractionally while Treasury yields are up 4-5 bps across the curve.