The data missed expectations across the board and although it doesn’t change much in the bigger picture (as the focus remains on tariffs), it will strengthen the market’s expectation for a 25 bps cut from the BoE at the upcoming meeting.
In the American session, we get the US Retail Sales report and the BoC Policy Decision. Some anecdotal data suggests that consumer spending is still holding up despite the bleak sentiment. Expectations of future spending is what the market cares about anyway.
12:30 GMT/08:30 ET – US March Retail Sales
The US Retail
Sales M/M is expected at 1.3% vs. 0.2% prior, while the ex-Autos figure is seen
at 0.3% vs. 0.3% prior. The focus will be on the Control Group figure which is
expected at 0.6% vs. 1.0% prior.
Consumer spending
has been stable in the past months which is something you would expect given
the positive real wage growth and resilient labour market. More recently
though, we’ve been seeing consumer sentiment cratering to record lows due to the
ongoing trade wars which could weigh on spending going forward.
13:45 GMT/09:45 ET – Bank of Canada Policy Decision
The BoC is
expected to keep rates unchanged at 2.75%. As a reminder, the BoC cut interest
rates by 25 basis points to 2.75% as expected at the last meeting amid concerns
over weaker growth ahead due to the trade uncertainty and US tariffs. The
central bank emphasized a cautious approach to future decisions, balancing the
upward pressure on inflation against the downward pressure on weaker demand. The
market sees a 57% probability of a rate cut today and a total of 50 bps of easing by year-end
