Canada: April CPI inflation to firm to 1.7% y/y - TDS
|Analysts at TDS are looking for April headline inflation of Canada to firm to 1.7% y/y vs 1.6% y/y in March, reflecting an increase of 0.4% m/m.
Key Quotes
“Energy prices on a year-ago basis are expected to remain supported on higher gasoline prices while shelter costs should maintain their upward pull in line with the ongoing tightness in the Canadian housing market. We look for the deflation in food prices to stabilize, though retail competition across grocery stores remains a source of downside risk in the near-term. Our forecast assumes the core metrics of inflation (CPI common, trimmed mean and median)—which averaged 1.5% y/y in March—to stabilize in line with the past reduction in economic slack. Though risk is limited in our view, markets will be attentive for further downside which would reinforce the Bank of Canada’s narrative that slack remains at material levels. We see risks to the report as balanced, with upside risks from falling resource slack and downside risks from retail competition pressures.”
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