Canada’s Jan CPI: Core inflation to remain muted – Capital Economics
|Analysts at Capital Economics offer a sneak peek on what to expect from today’s Canadian inflation report slated for release at 1330 GMT.
Key Quotes:
“Global bond markets have been shaken by the recent run of stronger wage and price inflation figures in the US. Although we have long expected that a rebound in core inflation south of the border would prompt the Fed to hike US interest rates more aggressively this year, we suspect that core inflation in Canada will remain slightly below the 2% mid-point of the Bank of Canada's target range.
The Federal Reserve has come in for sustained criticism for undershooting its 2% target for the PCE deflator measure for almost a decade now. But, based on its new measures, the Bank of Canada is almost as culpable, even though the recession a decade ago was much more modest in Canada and was not complicated by a full-blown financial meltdown or housing crisis.
January's consumer price data ... should show a modest rebound in gasoline prices from December. However, base effects caused by the big surge in energy prices a year ago mean that the annual headline inflation rate will still fall to 1.5%, from 1.9%. Nevertheless, the decline should be short lived, with an unwinding of those base effects pushing inflation back close to 2% in February.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.