Canadian January inflation data

  • Prior y/y reading was +1.5%
  • CPI +0.9% vs +0.4% m/m expected
  • Prior CPI m/m was -0.2%
  • CPI Common 1.3%
  • Prior CPI Common +1.4% y/y
  • CPI Median 1.9%
  • Prior CPI Median +2.0% y/y (revised to 1.9%)
  • CPI Trim 1.7%
  • Prior CPI Trim +1.6%

Those are some very hot headline inflation numbers and they come from a handful of areas that the BOC might look past. Gasoline rose 7.4% m/m and 20.6% y/y with energy up 4.5% m/m and 12.1% y/y. It also looks like that spilled over into the transportation category, which climbed 2.8% m/m. One surprise might have been shelter, which climbed +0.4% m/m but it's still a somewhat-manageable +2.4% y/y.

Overall, I think the BOC is still inclined to look through much of the rise but there is no good reason to retain any kind of dovish bias.