The market expects Canadian retail sales to have rebounded by 0.6% in May. However, the data is overshadowed by the BoC already penciling in a contraction of 0.5% q/q annualized for Q2 GDP, and having opted to ease right away rather than wait for the complete data picture to emerge. This suggests that BoC feels the economy needs more insurance from lower oil prices and we suspect it will remain focused more on the non-oil export sector than on domestic consumption. With USDCAD starting to attract momentum traders on the break of 1.30 and WTI oil falling below USD 50/bbl, we maintain a bullish view targeting 1.35.
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