Canada's July retail sales are expected on Thursday to be broadly in line with the advance estimate, which showed a 0.8% monthly decline from June, and would end a six-month streak of gains, according to RBC Economics in a note.
The underlying pullback was likely more pronounced after accounting for higher gasoline prices, with preliminary industry data pointing to a significant decline in vehicle sales in July, wrote RBC in a Friday note.
Still, strong gains earlier in the year suggest retail volumes remained relatively firm year over year, following a 2% increase through June, said RBC.
More recent indicators point to a recovery in August, as RBC card transaction data and a rebound in auto sales suggest consumer spending regained momentum, added the bank.
Statistics Canada is set to release July and preliminary August retail sales on Thursday, at 8:30 a.m. ET.