Canadian consumer price index data for July 2017
- Prior was 1.0% y/y (was lowest since Oct 2015)
- CPI m/m 0.0% vs 0.0% expected
- Prior m/m reading -0.1%
Core y/y numbers:
- Common 1.4% vs 1.4% prior
- Trim 1.3% vs 1.2% prior
- Median 1.7% vs 1.6% prior
No big surprises here as Canadian inflation rebounds from the lowest in nearly two years. The 1.2% y/y reading brings it back to where it was in May. On the core measures, it's the second consecutive rise for median CPI while trim rebounds after falling the month before.
Overall, the BOC is heavily relying on its forecasts for inflation rather than the data. They've basically dismissed recent low readings and said prices would rise late this year. I don't see anything in the headline numbers to change the plan.
That's the message from the market as well as USD/CAD drops to 1.2610 from 1.2650 before the data. If the BOC wants to hike, this number won't discourage them. Yesterday's low of 1.2598 is support.
