CAD: Retail sales data offers asymmetric risks, with greater downside bias - ING

While a small uptick in core CPI inflation last Friday helped to lift expectations for an October BoC hike, we think this is largely priced into CAD, suggests Viraj Patel, Research Analyst at ING.

Key Quotes

“The bigger debate is how many BoC rate hikes we get overall, and whether Canadian 2-year yields can move any higher. We remain cautious as NAFTA renegotiation risks, as well as broader US political uncertainty, could see policymakers tread more carefully. To offset these risks, we’d need to see another layer of positive macro news; the focus will be on June retail sales today and we see limited CAD upside risks.”