USD, CAD flows: USD slightly firmer after retail sales
US retial sales marginally on the firm side, underlying trend solid. Canadian CPI marginally weak. USD edges higher but focus on the Fed.
US retail sales were broadly in line with expectations, with the slight strength in the headline due to autos, but the underlying trend nevertheless remains quite solid and US front end yields have edged a little higher in response. Canadian CPI was slightly on the soft side of expectations, with two out of the three core measures that the BoC looks at coming in weaker than consensus. USD/CAD has moved slightly higher and the USD is generally a little firmer, but the moves are modest and with the market still pricing a near 65% chance of the Fed cutting 50bps tomorrow we wouldn’t expect any major moves ahead of the FOMC unless there is some major unscheduled event or statement.
