POLAND: MNI NBP Review - Dec 2025: Entering 'Wait-And-See' Mode

Italian retail sales momentum remains weak. In September, real seasonally adjusted retail sales fell 0.5% M/M SA (vs -0.3% prior), and 1.4% Y/Y NSA (vs -1.2% prior). On a rolling quarterly basis, sales fell 0.4% (vs 0.2% prior), returning to negative territory for the first time since April. A reminder that Italian Q3 flash GDP was weaker-than-expected at 0.0% Q/Q (vs 0.1% cons, -0.1% prior). ISTAT noted at the time that domestic demand was a drag on growth, and today's retail sales data suggests consumption was a contributor to this dynamic. 

• Both food and non-food sales contributed to the decline in real retail sales in September. Food sales fell 0.5% M/M SA (vs -0.4% prior), the third consecutive month of decline. On a 3m/3m SA basis, food sales fell 0.9% (vs a 0.2% increase prior). Non-food sales decreased 0.6% M/M SA (vs -0.1% prior), though remains relatively more stable on a 3m/3m basis (0.0% September vs 0.2% August). Looking at non-food Y/Y trends, the press release notes the largest increase was seen in "Cosmetic and toilet articles" (4.0% Y/Y), while the sharpest declines were observed in "Shoes, leather goods and travel items (-5.7%) and Clothing (-5.2%)".
• Looking ahead, ISTAT's retail confidence series rebounded in October. However, this indicator's correlation with actual retail sales momentum is relatively weak.

• In line with the broader greenback advance since the FOMC, USDCAD is also on a 5-session winning streak, currently trading at the highest level since April 09. Yesterday, we highlighted that the pair had breached 1.4080, the Oct 16 high, to confirm a resumption of the uptrend.
• Topside momentum has gained traction, with domestic developments assisting the move above 1.41. Canada yesterday budgeted its biggest ever cash deficit this fiscal year, excluding the pandemic, on a fiscal push to revitalize sluggish growth in the country.
• This week’s extension for USDCAD highlights a clear reversal of the corrective bear leg between Oct 14 - 29. Spot is currently testing 1.4136, the top of a bull channel drawn from the Jul 23 low. 1.4167 is the next level of note, the 50.0% retracement of the Feb 3 - Jun 16 bear leg, and above here, attention will be on 1.4274, the April 09 high.
• Final services PMI data will be released later today, however, it’s the October employment data that will be the focus on the Canadian data calendar, set to be a cleaner release given the lack of accompanying US figures. Currently a -5k change in employment is expected, with the unemployment rate seen remaining steady - further increases from the current 7.1% could fuel dovish bets.

OI data points to a mix of net long setting (TU, FV & WN) and short cover (TY, UXY & US) as Tsy futures ticked higher on Tuesday.

• There was a bias towards net long setting, with the movement in WN positioning providing the only real swing of note.