Canadian inflation figures on #da20 November 2019 at 1330GMT
A couple of CAD banks on what to expect:
TD (in brief0
- headline CPI forecast +0.4% m/m and + 2.0% y/y
- Gasoline prices were little changed on the month despite seasonal headwinds, which should see the year-ago drag from energy diminish by ~0.1pp.
- Outside of gasoline, we expect natural gas and heating oil to drive a modest increase in energy prices, reflecting unseasonably cold weather across Western Canada during the month.
- this will be more than offset by softer food prices following a pullback in producer-level food prices along with agriculture products
- Stripping out both leaves the ex. food & energy index up 0.6% m/m, with much of this driven by seasonal effects in apparel and telecoms. Looking to the Bank's preferred core measures, we see downside risks, owing to sizeable base-effects.
Scotia are also at 2.0% y/y & 0.4% m/m, citing:
- If nothing else were to change, then a shift in base effects would merit materially lower year-ago inflation
- The month-ago seasonally unadjusted rate of inflation is likely to pick up and add to the year-ago inflation rate because a) it's a normal seasonal up-month for prices, b) the prior month was unusually soft compared to seasonal norms, and c) an unusual blend of temporary factors is likely to moderate including a record cut in Ontario's tuition, a switch to cheaper winter blend gasoline and reductions in internet and cell phone service prices.
- The average of the three core inflation metrics is what will be monitored after oscillating between 2.0-2.1% for the past five months
