Canada: August CPI is a dull affair – TD Securities

Analysts at TD Securities note that Canada’s headline CPI was slightly weaker than expected in August with prices down 0.1% on the month which pushed inflation to 1.9% from 2.0% in July (market: -0.2%, 1.9%).

Key Quotes

“Gasoline was a significant source of weakness with prices down 5.0% m/m which shaved 0.15% off the headline print, while heating (-1.6%) and recreational fuels (-4.4%) added to the headwind.”

“Looking past the headline print, the Bank of Canada's preferred core measures edged slightly lower to 2.0% on average (from 2.03%) on a 0.1pp decline in CPI-common, while CPI-trim and CPI-median held at 2.1% y/y. Alternative core measures were more mixed, with ex. food & energy unchanged at 2.2% y/y while the old CPIX measure edged lower to 1.9% y/y. However, with headline holding near target and 2 of the Bank's 3 preferred measures still sitting above 2%, this will not do much to push the BoC off the sidelines before the end of the year.”