Notes From the Desk: CAD October CPI – Neither Here Nor There
Inflation rose slightly in October, with headline CPI at 2%. But this probably does very little to influence the Bank of Canada’s (BoC) decision in December.
The numbers.
- YoY CPI: 2% (1.9% expected)
- YoY CPI Median: 2.5% (2.3% expected)
- YoY CPI Trim: 2.6% (2.4% expected)
The implications.
While the numbers are slightly above forecast, there weren’t many upside surprises. Shelter, property, tax, and clothing costs were slightly higher than anticipated.
We believe the BoC will maintain the view that inflation is at target and focus on the growth numbers when making their next rate decision. While bond traders might marginally reduce the chances of a jumbo cut, it remains a coin toss whether they go 25 bps or 50 bps in December.
