Canada will release the retail sales for March and the preliminary April figure at 8:30 a.m. ET on Friday, said Bank of Montreal (BMO).
Consumers, who have been relatively resilient against a number of headwinds in recent years, face yet another shock in the Iran war and its resulting spike in energy prices, stated the bank.
BMO noted that, while it expects retail sales increased in March -- the bank's call of 0.5% month over month is a tenth softer than Statistics Canada's flash estimate -- it suspects the strength was largely driven by higher gasoline prices. Auto sales were a touch softer in the month, so sales excluding autos look to rise 1.0%.
Still, non-discretionary spending could take a hit as more household budgets are allocated to essentials like gasoline and home heating. Highlighting that point, BMO wouldn't be surprised to see an outright decline in spending volumes. The April flash estimate will provide a clue to the direction of spending beyond the immediate outbreak of the Iran war
Investors will also get industrial product (IPPI) and raw materials (RMPI) prices for April at 8:30 a.m. ET Friday, with both expected to post "chunky" monthly increases, given the higher commodity prices, added the bank.
The Bank of Canada's Senior Loan Officer Survey for Q1 will be released at 10:30 a.m. ET.
The recent backup in bond yields isn't helping housing markets in Canada or the United States, according to BMO. In Canada, the bank advises watching for buyers -- or the wave of those renewing -- to shift further into variable rates with the Bank of Canada on hold, possibly for the year.
That will come as fixed mortgage rates get pulled higher by the recent rise in the government of Canada (GoC) yields. In the U.S., the 30-year mortgage rate rose to 6.5% this week, or the highest level since last summer. Both markets look to remain quiet in the months ahead.