The synchronized economic slowdown has hit again, this time striking America’s latest trade war opponent, Canada, which moments ago reported some very ugly inflation and retail sales data.

First, on the inflation front, Canadian CPI rose just 2.2% in May from 2.1% in April, badly missing what Wall Street estimated would be an increase to 2.6% due to higher gasoline prices. According to Statistics Canada, the largest upside contributor to the inflation print was the recreation, education category, 0.27 percentage points, while the largest downside contributor was the household operations category, -0.12 percentage points.

Broken down by the various CPI metrics, the data was as follows:

• The average of CPI core measures was 1.90% y/y in May from 1.97% a month earlier
• CPI-common at 1.9% y/y in May from 1.9% in previous month
• CPI-median at 1.9% y/y in May from 1.9% in previous month
• CPI-trim at 1.9% y/y in May from 2.1% in previous month

The retail sales data was even worse, with the headline number tumbling -1.2% in April, well below not only the consensus estimate of an unchanged print , but also below the lowest end of the forecast range which was -0.4% to 0.2%. Core retail sales, ex-autos, also missed, falling 0.1% in April, est. +0.5%

Just like in the US, a big contributor to the miss appears to be the rise in e-commerce, with online sales of C$1.33B in April, up 8.8% from a year earlier and representing 2.7% of total retail sales.

Broken down by region, there was weakness all round, however Toronto was an outlier, with retail sales falling most since Jan. 2015. Poor weather weather may have hurt retail sales.

• Toronto retail sales -2.9% m/m
• Montreal retail sales -2.60% m/m
• Vancouver retail sales +0.2% m/m

Following the data, the Canadian loony tumbled by 100 pips, with the USCAD rising from 1.327 to 1.337, before regaining some losses.