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. 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.

Feed news

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!

Latest Forex News

Editors’ Picks

EUR/USD pressured around 1.13 after jump in US jobs

EUR/USD is trading around 1.13, down after US Non-Farm Payrolls shocked with a leap of 2.5 million jobs in May, contrary to all projections. The greenback is gaining while stocks are falling, a correlation breakdown. ECB stimulus previously supported the euro.


GBP/USD retreats from highs

GBP/USD is trading below 1.27, off the highs. The pound is struggling after Chief EU Negotiator Barnier reported little progress in Brexit talks. Robust US jobs support the dollar.


Gold sees weekly closing below $1700 - a caution for bulls

The steady decline in Gold prices (futures on Comex) accelerated on Friday, as the rates closed the week below the 1700 mark for the first time in three weeks at 1688.35. A weekly closing below the key 1700 level is unlikely to bode well for the bulls.

Gold News

Institutional demand exceeds Bitcoins supply

Greyscale floods the market with fresh money to satisfy the demand of its clients. Investors, willing to pay a 29% surcharge for exposure to Bitcoin without suffering the legal and operational inconveniences. Market remains at risk on the verge of new bullish territory.

Read more

WTI rallies above $39 as focus shifts to OPEC+ meeting

Crude oil prices built on Thursday's modest gains and rose sharply on Friday boosted by the upbeat market mood optimism surrounding Saturday's OPEC+ meeting. 

Oil News