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Canada’s retail sales rose 0.7% mom to CAD 72.1B in February, falling short of expectations for a 0.9% increase but still marking a solid gain after recent softness. The advance was relatively broad-based, with sales increasing in seven of nine subsectors.

The main driver came from motor vehicle and parts dealers, where sales rose 1.0% for a second consecutive month. Core retail sales, which exclude autos and fuel, also showed resilience with a 0.6% increase.

Looking ahead, preliminary estimates from Statistics Canada point to a further 0.6% rise in March.

Full Canada retail sales release here.

SNB Chair Martin Schlegel warned that the Middle East conflict is injecting significant uncertainty into the global economy, with rising energy prices set to push inflation higher in the months ahead. He noted that “the higher energy prices will lead to a further increase in inflation in many countries,” while also cautioning that global growth is likely to "slow temporarily".

Schlegel acknowledged that external shocks are beyond the control of the Swiss National Bank, stating that “the SNB cannot change the uncertain global environment.” However, he emphasized that policymakers remain focused on domestic stability and are capable of navigating these challenges.

He stressed that the SNB stands ready to act if needed, saying “we are prepared to adjust our monetary policy at any time.” Backed by institutional independence and a well-established framework, Schlegel expressed confidence that the central bank is “well equipped to ensure that we continue to fulfil our mandate”.

Germany’s business sentiment deteriorated sharply in April, with the Ifo Business Climate Index dropping from 86.3 to 84.4, the lowest level since May 2020. The decline reflects broad-based weakness, with both the Current Situation Index and Expectations Index falling to 85.4 and 83.3 respectively.

The drop in expectations signals growing concern over the economic outlook, as the impact of the Iran crisis feeds through rising energy costs and uncertainty. Services were hit the hardest, slipping deeper into negative territory, while manufacturing and trade showed modest improvements but remained firmly pessimistic overall.

The data underscores the vulnerability of Germany’s economy to external shocks, particularly energy disruptions. With sentiment deteriorating and expectations weakening further, the outlook points to a continued slowdown, reinforcing concerns that the Eurozone’s largest economy is being hit hard by the ongoing crisis.

Full German Ifo release here.