Friday is a big day for Canadian data

The Canadian dollar just touched off the lowest since September 11 and now it faces several major risk events in succession.

First up is the dual release of September CPI and August retail sales, both at 1230 GMT (8:30 am ET) on Friday.

The consensus for retail sales is a 0.3% m/m rise with ex autos up 0.1%.

Estimates range from -0.3% to +0.7%. RBC is among those who expect a miss:

"We see a 0.2% m/m decline in nominal retail sales in August. This is driven by expected declines of about 1% m/m apiece for both gasoline station receipts (on lower prices) and auto sales. Excluding those two items, core sales should rise 0.2% m/m, but the risks are to the downside, as it was up 2.3% cumulatively in the three months to July. Retail volumes are expected to match the 0.1% m/m decline seen in July. Such an outcome would leave them up 1.9% annualized in Q2, which matches our consumption forecast for the quarter."

CPI is forecast to rise 2.7% y/y and +0.1% m/m (with estimates +/- 0.1 pp) but the focus is on the BOC's three core measures. Prior on common is at 2.0% with the priors on median and trim at 2.1%.

RBC is in-line with consensus.

"We expect a marginal 0.1% m/m gain in headline CPI for September, which would edge the YoY rate down to 2.7%. Seasonals have a strong-and mostly offsetting-impact in the month, including clothing & footwear and tuition fees (positive) and fruit & vegetable prices (negative). The latter should see their YoY rate increase, as the seasonal decline should be less than last year. A more pronounced moderation in airfares is expected after July's 16.4% m/m gain was followed by decline of only 2.0% m/m in August. Gas prices appear to have been close to flat in the month, but that should see the category's YoY rate move down from ~20% to closer to 13%. All three of the BoC's core measures rose 0.1pp in August (average of 2.1%) and we see them continuing to show underlying inflation around 2%, as they have since February."

After the data, the focus will shift to the Bank of Canada decision on Wed, Oct 24. A hike is priced in.