Underlying Canadian inflation cools, lowering monetary tightening expectations
There was again little evidence of energy price spillovers in Canada last month, with underlying inflation pressures holding steady, slightly reducing market-implied odds on a rate hike from the Bank of Canada at its meeting next week. Data released by Statistics Canada this morning showed core inflation – which strips out food and energy prices – and is computed as the average of the two price measures now preferred by the central bank (trim and median) – rising just 1.9% on a year-over-year basis from 2.0% previously. Although a jump in gasoline prices lifted the headline all-items measure, with prices...