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Canada March retail sales down 0.2%; seen up 0.7% in April

OTTAWA (Reuters) -Canada’s retail sales contracted for a third consecutive month and dropped by 0.2% in March, data showed on Friday, led primarily by sales of furniture, home furnishings, electronics and appliances.

For the quarter that ended March 31, retail sales were down 0.2%, Statistics Canada said.

Analysts polled by Reuters had forecast no change in retail sales from what they were in February.

A preliminary estimate of April’s sales figure showed that sales were likely to increase by 0.7%, but this data is sourced only from half of the total respondents usually surveyed, Statscan said.

Sales were down to C$66.4 billion ($48.41 billion), impacted by a drop in sales in seven out of nine subsectors. In volume terms, sales decreased by 0.4% in March.

The Bank of Canada (BoC) is likely to cut interest rates at its June 5 monetary policy decision announcement as a sustained drop in inflation and lackluster growth have added to the evidence that underlying inflation has been most likely tamed. Friday’s sales numbers will give it one more piece of evidence that the economy is losing steam.

Money markets increased their bets for a rate cut in June to 62% from 60% after the retail sales data was published.

($1 = 1.3715 Canadian dollars)

(Reporting by Promit Mukherjee and Dale Smith; Editing by Chizu Nomiyama)

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