Canadian November inflation data

  • m/m -0.4% vs -0.3% exp
  • Prior m/m +0.3%
  • CPI index 130.8 vs 131.3 prior
  • Ex-gasoline +1.5% vs +1.5% prior

Core measures y/y:

  • CPI core common +1.6% vs +1.5% prior
  • CPI core trim +1.9% vs +1.8% prior
  • CPI median 1.9% vs 1.9% prior

In all, December CPI was weak but it was largely expected because of a 3.3% drop in gasoline. The tick higher in the core measures y/y will keep the BOC on track but drops in clothing (-3% m/m), household furnishings (-1.5% m/m) and 'recreation, education and reading (-1.6% m/m) are concerns.

The initial USD/CAD reaction was choppy but it's now about 20 pips higher at 1.2325 but that's more likely due to solid US data at the same time.

Join the conversation in our new Telegram group