Highlights of the Canadian inflation report:
- Prior 2.3% y/y
- Prices up 0.1% m/m vs 0.0% expected
- Prior +0.5% m/m
- Core CPI 1.8% y/y vs 1.7% exp
- Core CPI -0.1% vs -0.2% m/m exp
Canadian CPI
The Bank of Canada has warned about transient factors boosting Canadian inflation and don’t seem overly concerned. Digging through the report, nothing in particular stands out. The ‘clothing and footwear’ category was down 1.9% m/m but only up 1.6% y/y, transportation added 0.16 percentage points but that’s probably the lagged effect of higher energy prices passing through.
USD/CAD down as low as 1.0709 but quickly back to 1.0729. I think ultimately the BOC will be proven right on inflation.
