TD Securities strategists look for Canadian Retail Sales to rise 1.1% month-on-month in May, slightly above the 1.0% consensus, driven by higher gasoline prices and a rebound in core spending. They expect ex-autos sales to climb 1.4% and see a recovery in ex-autos/gas as fuel price pressures ease alongside stronger May job growth and higher consumer goods imports.

Canada May Retail Sales preview

"We look for retail sales to rise by 1.1% m/m in May, just above the flash estimate and market consensus for a 1.0% print, on another large tailwind from higher gasoline prices alongside a rebound in core sales."

"Gasoline prices rose by another 5% m/m in May before stabilizing, which will provide a key driver for the headline print after fuel stations contributed 0.5pp to retail sales growth in April."

"Motor vehicles should see more modest gains to build on their 1.7% increase last month, leaving the ex-autos measure up 1.4% (market: +1.1%)."

"We also look for a rebound in the ex-autos/gas measure after the consecutive declines over Mar/Apr; higher fuel prices have been pinching core retail sales since the beginning of the US-Iran conflict, but we look for these to bounce back with the rebound in May job growth along with a sharp increase in consumer goods imports."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)