Canada: CPI offers little reason for the Bank of Canada to react - CIBC


Analysts at CIBC, point out that today’s inflation data from Canada came in below expectations, but not enough to move the needle of the Bank of Canada. 

Key Quotes:

“Canadian inflation flew in under expectations for September, but not enough to move the needle on Bank of Canada policy. A sharp reversal in airline fares meant that there was some turbulence in the monthly reading, but since a similar pattern occurred a year ago, the annual pace of inflation was still just a hair below the central bank’s target. As a result, the undershoot versus expectations shouldn’t have any major implications for the Bank of Canada, which we expect to remain on hold later this month.”

“Combined with the strength of the last two employment reports, it now appears that we'll be waiting until January for sufficient signs that a slowing global economy is impacting Canada enough to warrant the lone 25bp rate cut we are projecting.”

“Given that the miss on Canadian CPI was simply the result of a sharper reversal of the prior jump in airline fares, and that all of that volatility is due to a methodological change, there’s little reason for the Bank of Canada to react.”
 

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.

Feed news

Latest Forex News

Editors’ Picks

EUR/USD defends 1.1000 ahead of key data, Powell’s testimony

EUR/USD off four-week lows but downside risks persist. USD/CNY’s rise amid trade uncertainty could limit the EUR bulls. The focus stays on Eurozone Industrial Production, US CPI and Powell’s testimony.

EUR/USD News

GBP/USD: Modestly changed below 21-day SMA ahead of UK CPI

While the absence of major catalysts from the UK has recently tamed the GBP/USD pair’s moves, the market’s fear ahead of the key data/events also contributes to the latest inactivity. The Cable seesaws around 1.2850 during pre-London open on Wednesday.

GBP/USD News

USD/JPY supported at 10-DMA amid risk-off, eyes US CPI, Powell

USD/JPY bounced-off the10-DMA support near 108.85 and regained the 109 handle, despite the risk-off action in the Asian equities and US equity futures amid trade deal uncertainty. The bulls seem to have found some support from higher US Treasury yields. 

USD/JPY News

Gold fails to hold on to recovery amid USD strength, trade woes

Although pessimism surrounding the US trade relations with China and the EU, coupled with Hong Kong protests, favored Gold to bounce off multi-month lows on Tue, prices are again under pressure while taking rounds to $1,458 during today’s Asian session.

Gold News

UK inflation report outlook: GBP/USD may stumble on another CPI slide

Headline Consumer Price Index (CPI) has missed expectations in the past two months by standing at 1.7% annual. Economists seem to have adapted their expectations and forecast a further deceleration to 1.6% in October's inflation report. 

Read more

Forex MAJORS

Cryptocurrencies

Signatures