As noted previously, the data is due at 1330 GMT

Previously? you ask ... yes, here:

Canada inflation due today - previews

A few more now:

RBC:

  • We see headline CPI falling by 0.3% m/m in December due to lower gasoline prices and seasonal declines in multiple categories, including apparel and household entertainment. Those seasonal declines will leave the ex-food and energy measure down 0.4% m/m but unchanged on a year-ago basis after it rose 0.4pp to 1.8% in November.
  • The average of the BoC's three core measures rose over 0.1pp to 1.73% in November, the highest level in just over a year. The BoC has described increases over the past six months as "consistent with diminishing slack in the economy." Base effects on two of the three measures mean that another rise may be difficult, but we would anticipate them being little changed in December.

Scotiabank:

Headline CPI could well slip back below 2% y/y but the key will be what happens to core inflation anyway, not least because the BoC is looking through an expected temporary soft-patch in headline CPI. Here are the key ingredients to the call:

  • Base effects independent of all else would support a rise of headline CPI from 2.1% y/y in November to 2.3% y/y in December. But December is usually a seasonal down-month. In fact, on average, CPI has declined by 0.4% m/m over the past five Decembers and CPI has fallen in eight of the nine past Decembers and one (2010) was unchanged. The decline might be more powerful this time since November 2017 was an atypical month of November when seasonally unadjusted prices climbed by 0.3% m/m versus the fact that they fell by 0.2% m/m on average over the prior five Novembers. That poses a high jumping off point for December's prices.
  • Further reinforcing this point is that gasoline prices fell by 3% m/m in seasonally unadjusted terms in December which would reinforce a seasonal down-month for headline CPI and this would subtract about two-tenths off of the year-ago CPI rate.

Core CPI by the average of the three central tendency measures is nevertheless the usual area of uncertainty and the bigger risk than headline CPI for BoC purposes.

  • The average of the three measures has moved higher from a low of 1.3% y/y in May to 1.7% in November and has therefore showcased somewhat greater traction than core PCE inflation in the US. Indeed, core inflation in Canada is just three tenths off the target. It would not take much at all to get core inflation rising to 2% y/y over the duration of this year.

HSBC:

  • We look for consumer prices to drop by 0.3% month-on-month in December. The drop would include a 3.1% drop in gasoline prices in the month. If prices fall as we expect, the rate of consumer price inflation would dip to 2.0% year-on-year from 2.1% in November.
  • We also expect a small decline in the average of the three measures of core inflation to 1.6% year-on-year from the previous 1.7%.