Notes From The Desk: CAD Inflation – The Trend is Your Friend (May-21-2024)
Canadian inflation declined for the fourth month in a row, with all measures now below 3%.
By the numbers:
- Headline CPI fell from 2.9% last month to 2.7% (2.7% expected).
- CPI Trim fell from 3.2% to 2.9% (2.9% expected).
- CPI median fell from 2.9% to 2.6% (2.7% expected).
The implications:
Today’s data brings rate cuts into sharper focus, with yields 5-7 bps lower this morning.
- The bond markets have a cut at the June 5th meeting as a coin toss.
- We believe that if they don’t cut in June, they will cut in July.
