CAD Wholesale Sales Declined In October

CAD Wholesale Sales (Oct) Actual -1.8%, Expected -0.5%, Previous 1.1% (Revised from 1.5%)

Release Explanation: Measures the total value of sales at the wholesale level. A rising trend has a positive effect on the nation's currency because increased sales at the wholesale level are a good indication that there is high consumer demand at the retail level.

Trade Desk Thoughts: According to Statistics Canada, wholesale sales in current dollars fell 1.8% to $45.3 billion in current dollars in October, following a 1.1% increase in September. Declines in the recycled metals industry and the automotive sector were the main contributors. In real terms, adjusted for inflation, wholesale sales were down 3.6% in October.

The depreciation of the Canadian dollar also contributed to the decline in real wholesale activity; additionally, export demand slowed during the month as the global economy cooled.

The largest decline (-8.0%) occurred in the "other products" sector, which registered its biggest monthly drop since March 2001. Sales of automotive products fell 5.4%, due primarily to a 6.9% decline in motor vehicle sales. The food, beverages and tobacco sector showed the largest monthly increase, advancing 1.8%. Sales in the machinery and electronic equipment sector rose 0.4% in October, its eighth consecutive monthly increase.

Forex Technical Reaction: After making a strong one-day advance on Tuesday, the loonie is declining slightly to the greenback on the day as crude futures decline 4 cents. USD/CAD gained about 25 pips immediately after the report

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