The Canadian dollar has recovered some losses but remains down for the week. The data shows a further decline in Canada’s Retail Sales, limiting the recovery. Broad market risk appetite recovers after US inflation expectations ease.
Canadian Retail Sales slid -0.2% MoM in March, missing the forecasted recovery to 0.0%. US Durable Goods Orders rose 0.7% in April, shrugging off the -0.8% forecast. The University of Michigan’s Consumer Sentiment Index printed higher at 69.1 compared to the previous month’s 67.4. Median market forecasts had expected a slight uptick to 67.5.
The University of Michigan’s 5-year Consumer Inflation Expectations in May eased to 3.0% versus the expected hold at 3.1%. Market sentiment is recovering after a midweek spike in risk aversion sparked by a harsh rebalancing of investor rate cut expectations.
The CME’s FedWatch Tool shows that rate markets are pricing in nearly-even odds of a Federal Reserve rate cut in September, down sharply from 70% at the beginning of the week.
Tags Canada inflation Retail Sales University of Michigan
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