Canada April CPI 4.4% YoY versus 4.1% expected

• Prior was 4.1%
• CPI YoY 4.4% vs 4.1% expected
• CPI m/m 0.7% vs +0.4% expected
• Prior m/m reading was 0.5%
• Gasoline prices -7.7% vs -13.8% y/y in prior month (largest decline since July 2020)
• Gasoline prices 6.3% m/m vs -1.2% prior month. The gain was the largest since October 2022 and contribute the most to the CPI gain this month
• Food 9.1% vs +9.7% y/y prior
• Mortgage interest costs 4.9% y/y vs 5.4% increase in March. Year on year interest costs +28.5%. Rents increased by 6.1% in April

Core measures:

• BOC core y/y 4.1% vs 4.3% last
• BOC core m/m + 0.5% vs +0.6% prior
• Median 4.2% vs 4.3% expected. Prior 4.6%
• Trim 4.2% vs 4.1% expected. Prior 4.4%
• Common 5.7% vs 5.5% expected. Prior 5.9%

The Consumer Price Index (CPI) for Canada in April showed an increase of 4.4% year-over-year, up from 4.3% in March. This is the first acceleration in inflation since June 2022. Key drivers included higher rent prices and mortgage interest costs. On a monthly basis, CPI increased by 0.7%, up from 0.5% in March, with gasoline prices making a significant contribution.

Here are the key highlights:

• Gasoline prices rose by 6.3% in April compared with March, marking the largest monthly increase since October 2022. However, compared to April 2022, gas prices were 7.7% lower, primarily due to high prices last year resulting from Russia's invasion of Ukraine.

• Shelter costs increased by 4.9% year-over-year in April, with Canadians paying 28.5% more in mortgage interest costs compared with April 2022. This is likely due to more mortgages being initiated or renewed at higher interest rates, stimulating higher rental demand which rose by 6.1%.

• The year-over-year increase in the homeowners' replacement cost index slowed for the 12th consecutive month in April, reflecting a general cooling of the housing market.

• Prices for groceries increased by 9.1% year over year, a slower rate than the 9.7% increase in March. This slowdown was due to smaller price increases for fresh vegetables and coffee and tea.

• Regionally, prices rose at a faster pace in April compared with March in five provinces, with the most significant acceleration in price growth seen in Alberta, primarily due to higher electricity prices.

The MoM a year ago rose 0.6% MoM while the core rose 0.7%. Those numbers fell out of the YoY numbers, but the MoM and YoY numbers are certainly a disappointment and could see the BOC coming off their conditional pause game plan.

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The USDCAD has moved lower on the stroller data and taken the price back below a cluster of moving averages including the 100 hour moving average 1.3466, the 200 day moving average of 1.34606, and the 200 hour moving average 1.34488. That area between 1.3448 and 1.3466 is now upside resistance. The price is currently trading at 1.3433 after trading to a session low of 1.3427. The next target area comes between 1.3404 and 1.34214.

/inflation Inflation Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Read this Term