Canada Retail Sales and US Existing Home Sales due out this morning

As we enter the US Thanksgiving Day week (on Thursday), the economic calendar will start with the Canadian Retail Sales report which will be released at 8:30 AM.  The expectation is for a gain of +0.6% with Ex Auto sales coming in at +0.4%. 

The Canadian Retail Sales have been improving in 2009 as the global economy improves.  Gas station sales have been the chief contributor over the last 3 months with a 21.8% annualized gain.  However, over the same time period strong gains in pharmacy sales (+13%), Building Supplies (+3.9%) and Furniture and electronics (+3.1%) have also led to gains in ex auto sales.  This segment of the report has shown increases in 3 of the last 4 months indicating the economy is showing some signs of bottoming across various sectors.

At 10:00 AM this morning, the US Existing Home Sales for the month of October will be released. The expectation is for the annualized sales pace to rise to 5.7 million units. This is up from the 5.57 million pace last month and would represent a 2.3% MoM gain.  Be careful in interpreting the MoM % gain as there is usually a revision to the prior month that can skew the figures.  So watch the annualized rate to gauge the strength or weakness of the report.  A sales pace of 5.7 million would be the highest since July 2007.  The 1st time homeowners rebate program is helping sales - especially in the low price range. 

Also released with the annualized sales pace is the months supply of homes on the market.  Last month, the supply of homes fell sharply to 7.8 months which is the lowest supply since March of 2007.  A movement lower would be good news for the housing market.  Watch this number. There is no estimate for this figure.

Canada Retail Sales fall unexpectedly

The Canada Retail Sales fell by -0.8%  versus expectation of 0.1% increase.  The Less Autos number also came in weaker at -0.5% vs -0.1%.  This should pressure the Cad$ (higher USDCAD). However, it runs in the face of the trend so far.  Oil prices area higher today which has pressured the USDCAD overnight.

Most of the categories were lower than last month. 

Automotive               -1.9% vs   0.6% last month
 Gas stations                -1.9%  vs   -3.0% last month
Furn/electronics      -0.8%  vs   -0.1% last month
Building supplies        0.3% vs    -0.5% last month
Food & beverage        -1.0%  vs    0.7% last month
 Supermarkets            -0.7% vs     0.8% last month
Pharmacies                  -0.4%  vs    0.4% last month
Clothing           -             0.6%  vs   -1.3% last month

Canada Retail a little worse than expected

Canada Retail Sales are lower than expectations coming in at +0.3% versus +0.5% expectations.  The core measure that excludes autos fell by -0.2% (exp -0.1%).  Higher auto sales due to discounting contributed to the gains.

Month on month changes are below:

Automotive                 0.5% 
 Gas stations               -2.8% 
Furn/electronics     -0.2% 
Building supplies      -0.6% 
Food & beverage       0.9% 
 Supermarkets             0.9% 
Pharmacies                 0.5% 
Clothing                       -0.5%

Canada Retails Sales are stronger than expectations

They rise by 1.9% for the month of January which is greater than the 1.0% expectation.  Ex Autos, the sales increased by 1.3% versus 0.4% expectation.   The gain was first in 4 months and the largest since July 2006. This should be bullish for the Canadian dollar (down USDCAD).  Discounting after dismal Christmas sales helped the sales.

Total retail                     1.9% vs   -5.2%
  ex-vehicles                  1.3% vs   -3.1%
Automotive              3.8% vs -11.8%
 Gas stations                 2.6%  vs -9.9%
Furn/electronics     -0.7% vs  -2.7%
Building supplies      -1.4%  vs -5.5%
Food & beverage        2.1%  vs -1.2%
 Supermarkets              2.2%  vs -0.8%
Pharmacies                   2.0%  vs-1.5%
Clothing                          3.0%  vs -3.7%

New Auto Vehicle Sales increased by 5.5% for the month.  The prior month was revised to a better -10.8 decline versus a -14.8% decline originally reported.