Canada: Retail sales and CPI both look to slow - BBH

Analysts at BBH suggest that Canada reports June CPI and May retail sales and in their view, sequentially both look to slow.  

Key Quotes

“The headline CPI is expected to ease 0.1%, which would bring the year-over-year pace to 1.1% from 1.3%.  The central bank has recently introduced new underlying measures and they are all running a little hotter than the headline.  Just like low inflation readings are limiting the degrees of freedom of the ECB, Fed, and BOJ, they also will likely deter a tightening cycle in Canada after officials unwind the accommodation provided in 2015 (two cuts).”

“May retail sales are expected to slow from the heady 0.8% gain in April.  However, note that the four-month average gain in Canadian retail sales this year (0.9%) is nearly twice the pace as last year (0.5%).  This will be the fourth consecutive week the US dollar has fallen against the Canadian dollar.  It is the longest losing streak since April 2016.  The US dollar is trading within yesterday's ranges.  Resistance is seen near CAD1.2640, while many see psychological importance of the CAD1.25 level that corresponds to $0.8000.”