Canada retail sales for September -0.5% vs. 0.1% exp

Ex Auto -0.5% vs -0.4% exp.

The Canada retail sales for the month of September come in weaker than expectations at -0.5% for both the headline and the ex Auto number. The market was expecting a +0.1% for the headline and -0.4% ex auto. The prior month showed gains of +0.5% and 0.0% respectively. The chart below shows the month on month headline changes. In 2015, the year got off to a bad start, picked up. The fall this month brings the series back to the negative.

The USDCAD initial reaction was to the upside (weaker CAD) to a high at the 1.3326 level, but the price is trading back lower to the 100 hour MA at the 1.3309. Oil is down 0.39 in early trading at 40.15.

The fall is being attributed to cheaper gasoline. Sales at gasoline stations fell 3.7%. That contributed -0.39% to the -0.5% decline. The biggest upside contributor was general merchandise which contribute 0.15%.

Excluding price changes, the sales rose 0.1% in September so the market seems to be discounting the decline - attributing the surprise fall to transient price declines.

The price is currently trading lower now and is breaking below the 200 hour MA. CPI was a touch higher and may be contributing to the better CAD tone.