Market Wire, North America

Headline Canadian inflation slowed last month, and underlying price indicators eased, alleviating pressure on the Bank of Canada to follow its southern counterpart in signalling a more aggressive pace of rate increases. Data released by Statistics Canada this morning showed the Consumer Price Index rising 5.9 percent on a year-over-year basis in January, below consensus expectations for a 6.1 percent increase, even as the month-over-month change hit 0.5 percent – exceeding a forecasted -0.1 percent decline. Gasoline prices rose 4.7 percent month-over-month. Shelter costs decelerated, up 6.6 percent year-over-year, down from December’s 7-percent pace as rate hikes impacted the housing...

In what could become its last move in this tightening cycle, the Bank of Canada lifted its benchmark overnight rate by a quarter percentage point to 4.50 percent this morning, while clearly setting the stage for a conditional pause at coming meetings. In the statement accompanying the decision, the central bank said “The Bank’s ongoing program of quantitative tightening is complementing the restrictive stance of the policy rate. If economic developments evolve broadly in line with the MPR (Monetary Policy Report) outlook, Governing Council expects to hold the policy rate at its current level while it assesses the impact of...