Canada retail sales ex autos
CIBC sees Canadians growing more cautious about spending as mortgages come up for renewal at much higher rates.
Retail sales fell 0.1% compared to +0.1% expected while sales excluding autos fell 0.3%. The rapid rise in Canada's population also continues to make the numbers look better than the reality with total sales now 2.2% below year-ago levels.
CIBC also notes that warm early-year weather also likely skewed the picture.
"Real goods spending for the quarter a whole still looks healthy, but that reflects the boost to activity at the turn of the year from mild winter weather. Momentum has clearly waned since then, and spending will remain under pressure with the unemployment rate rising and mortgages continuing to renew at higher interest rates. As a result, the BoC will likely start trimming interest rates in June."
The market is pricing in a 49% chance of a cut in June, so it's a close call.
