Canada inflation data due Friday - preview

February retail sales and CPI data coming up from Canada at 1230GMT on 22 March 2019

Barclays with a heads up preview for the CPI and what the Bank of Canada is watching:

• We forecast headline CPI to have increased 0.4% m/m in February (1.3% y/y), driven by mildly higher gasoline prices and Q1 seasonality.
• We expect core inflation to shift mildly lower in the coming months before slowly recovering toward 2% by year-end.
• The BoC remains in wait-and-see mode and will need to see an improvement in inflationary pressures before resuming tightening.

TD:

• Stronger gasoline and food prices will help CPI firm to 1.5% y/y in February; however, we see downside risks to core inflation and with headline expected to hold below 2% for most of 2019, a small uptick will do little to change the narrative.
• Retail sales should prove slightly more upbeat although this will be insufficient to make up for the large drag from energy in January.