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Canadian Retail Sales Soared and Inflation Ticked Up

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Inflation rose in December

For December, consumer inflation rose by 1.6%—compared to growth expectations of 1.7% on an annual basis. It rose by 1.4% in the previous month. On a monthly basis, prices fell by 0.5% in December. This was lower than the 0.4% deflation forecast and a fall of 0.1% in November. The core inflation rate for December excludes volatile items. It grew by 1.9% on an annual basis. This was lower than the estimated rise of 2.1% and a 2.0% rise in November.

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Retail sales got a boost in November

The retail sales for November rose at a faster pace of 3.2% on an annual basis—compared to 1.9% growth in the previous month. On a monthly basis, retail sales rose by 1.7% in November. They rose by 0.1% in October. Core retail sales exclude the automobile sector. They rose by 1.1% on a monthly basis in November compared to flat growth in the previous month. They beat the expectations of an 0.4% rise.

Impact on the market

The Guggenheim CurrencyShares Canadian Dollar ETF (FXC) also rose by 0.95% on January 22, 2016, following the gains in the Canadian dollar.

Canadian banking American depositary receipts trading in US markets also followed a rising trend. The Bank of Montreal (BMO) rose by 4.8%. The Royal Bank of Canada (RY) and Bank of Nova Scotia (BNS) were trading higher by 4.7% and 4.2%, respectively, at the end of the day. Also, the Canadian Imperial Bank of Commerce (CM) ended on a higher note by 5.1%.

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