The June inflation data from Canada follows only days after the latest move from the Bank of Canada:
- Bank of Canada raises rates by 25 basis points to 5.0%
- Bank of Canada's Macklem: Our forecast has inflation moving around 3% most of next year
Scoita is not expecting a lot from the event:
- Canada will update CPI inflation for the month of June on Tuesday. This one is probably just a placeholder that may spark some market volatility but without settling anything in terms of positioning for the Bank of Canada’s next potential move. That’s because the BoC has just splashed fresh ink on a new forecast to accompany their decision to hike again. They don’t have to come off the bench again until September 6th and so they have most of eight weeks to ponder their next move, do further analysis
- During this period, they will deliver their Summary of Deliberations to the recent decision on July 26th, and then evaluate another inflation report on August 15th, one more report on jobs and wages on August 4th, their Senior Loan Officer Survey on August 14th, Q2 GDP on September 1st, the outcome of the Fed’s Jackson Hole symposium on August 24th – 26th, and sundry other developments at home and abroad. The BoC has made it clear that its next possible moves will be data dependent and this includes the suite of evidence that will become available.
- Among the things to watch for will be service price inflation that has remained hot, and whether the prior month’s deceleration in goods price inflation will persist. Whether the direct role of house price inflation on CPI builds could play a modest role. Recall that Canadian CPI doesn’t use owners equivalent rent like the US, and instead uses the replacement cost of housing by relying upon builder prices excluding land. This measure accelerated during the pandemic and may be about to once more
- The Canadian economy remains well into excess aggregate demand.
- This snapshot from the ForexLive economic data calendar, access it here.
- The times in the left-most column are GMT. Data is due at 8.30am Eastern time
- The numbers in the right-most column are the 'prior' (previous month/quarter as the case may be) result. The number in the column next to that, where there is a number, is the consensus median expected.
