Similar inflation dynamics are unfolding in Canada and the US so the two CPI reports are a worthwhile crosscheck on each other. The US report last week was higher than anticipated, particularly on the core side.
Today, Canadian CPI is forecast to fall 0.1% m/m while the y/y figure is expected to decline to 7.3% from 7.6%. The core 'common' measure is the only one of the three with a consensus estimate and it's at 5.6% from 5.5%.
The data is due at the top of the hour along with US housing starts, which is also a potential market mover.
USD/CAD is up 37 pips today today 1.3284. It was higher yesterday early in Toronto trade and eventually hit a 22-month high of 1.3346 before reversing a full cent lower on the turnaround in oil and risk sentiment. Today, S&P 500 futures are down 22 points and oil is a fraction lower.
