The global economic docket was very light today; but there was still a top market mover for the day: Canadian retail sales. It is hard to forget the massive 5.4 percent drop in the December consumption report last month. After such an aggressive decline, some tempering was inevitable; and that is how the 1.9 percent pick up in January receipts was treated. It was the biggest pickup since July of 2006, with notable increases in auto, food and clothing purchases. Given the trend this data has been through, it will take broader and more significant improvements to generate optimism about Canada’s future.
Looking ahead to next week, an otherwise anemic calendar will be dominated by the typically under-the-radar New Zealand dollar. The top release will be the fourth quarter GDP and current account figures. This is the last of the majors to see its growth numbers; and the forecast isn’t promising. A 1.1 percent contraction through the three month period is expected to slow the annual pace to 2.0 percent – the worst pace since 1991. This will be a critical indicator for the kiwi dollar as the risk appetite wave the currency has shared with its Aussie counterpart is partially based on expectations that the currency is seeing relatively strong growth and rates. The RBNZ hasn’t curbed its cuts; so expectations are high.
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