- Prior was 3.4% y/y
- CPI m/m 0.0% vs +0.4% expected
Core measures
- CPI Bank of Canada core y/y 2.4% vs 2.6% prior
- CPI Bank of Canada core m/m +0.1% versus -0.5% prior
- Core CPI MoM SA -0.1% vs +0.1% prior
- Trim 3.4% versus 3.7% prior
- Median 3.3% versus 3.6% prior
- Common 3.4% versus 3.9% prior
A high January 2023 headline number rolled off, providing some help for the top-line number but it was the opposite for the core reading. Starting in February, there should be some help on both fronts and that will accelerate declines.
However even without the help, the Canadian dollar fell across the board. This will give the Bank of Canada more latitude to cut rates sooner. If they're wise, they won't wait. Market pricing for March is up to 27% from 19% before the data while year-end pricing is 76 bps vs 64 bps before the data.
In terms of details, gasoline prices fell 4.0% in January while airfares (-14.3% m/m) and travel tours also knocked down CPI. On a year-over-year basis, cell phone prices fell 16.4%.
