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A Sweep Of July Cut Expectations In Initial Post-CPI Analyst Notes

CANADA
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BMO bring forward their rate cut call to July as noted earlier.

  • BMO: “The June CPI came in on the soft side continuing the slow but steady march toward the 2% inflation target. Today's CPI report, taken with the weak Q2 Business Outlook Survey, the ongoing march higher in the jobless rate, and increased economic slack are expected to provide policymakers with enough confidence that inflation will continue slow to ease policy rates 25 bps to 4.5% on July 24.”
  • CIBC: “This report confirms that the weak demand backdrop is bringing inflation down towards target. […] The BoC's latest round of business and consumer surveys showed that inflation expectations are easing off on balance, which will also provide the BoC with more comfort to continue to cut rates, and it's also looking like they will have to worry less about policy divergence with the Fed that is set to cut in September.”
  • Desjardins: “A return to tepid consumer price growth likely seals the deal for a follow up 25bp rate cut from the BoC next week. Along with significant declines in inflation expectations and a further normalization in corporate pricing behaviour, the latest inflation data build a strong case for continuing the rate cutting cycle without delay. That’s particularly true in light of the subdued survey responses from consumers and businesses about the outlook for the Canadian economy.”
  • National: “We've been arguing for some time that Canada's widespread inflation problem has long been solved and is limited to the shelter component. All we have to do is remove the mortgage interest component, whose rise is largely attributable to the BoC itself, and annual inflation is only 1.9%, compared with 2.7% for the basket as a whole. And it's not as if there's any indication that inflation will accelerate in the coming months, quite the contrary. […] All in all, this morning's data is consistent with our view that the Canadian economy is in great need of oxygen and we still expect a rate cut in July.”
  • RBC: “BoC’s preferred CPI trim and CPI median both dropped lower on a monthly basis although the narrower “supercore” measure held slightly higher. Yesterday’s second quarter release of the BoC’s Business Outlook Survey largely confirmed further normalizing in a few key areas that the central bank has deemed critical to future inflation trends […]. All told, we expect the BoC will carry on with easing the monetary brakes on a weak economy, and follow up with another rate cut at its July meeting next week.”
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BMO bring forward their rate cut call to July as noted earlier.

  • BMO: “The June CPI came in on the soft side continuing the slow but steady march toward the 2% inflation target. Today's CPI report, taken with the weak Q2 Business Outlook Survey, the ongoing march higher in the jobless rate, and increased economic slack are expected to provide policymakers with enough confidence that inflation will continue slow to ease policy rates 25 bps to 4.5% on July 24.”
  • CIBC: “This report confirms that the weak demand backdrop is bringing inflation down towards target. […] The BoC's latest round of business and consumer surveys showed that inflation expectations are easing off on balance, which will also provide the BoC with more comfort to continue to cut rates, and it's also looking like they will have to worry less about policy divergence with the Fed that is set to cut in September.”
  • Desjardins: “A return to tepid consumer price growth likely seals the deal for a follow up 25bp rate cut from the BoC next week. Along with significant declines in inflation expectations and a further normalization in corporate pricing behaviour, the latest inflation data build a strong case for continuing the rate cutting cycle without delay. That’s particularly true in light of the subdued survey responses from consumers and businesses about the outlook for the Canadian economy.”
  • National: “We've been arguing for some time that Canada's widespread inflation problem has long been solved and is limited to the shelter component. All we have to do is remove the mortgage interest component, whose rise is largely attributable to the BoC itself, and annual inflation is only 1.9%, compared with 2.7% for the basket as a whole. And it's not as if there's any indication that inflation will accelerate in the coming months, quite the contrary. […] All in all, this morning's data is consistent with our view that the Canadian economy is in great need of oxygen and we still expect a rate cut in July.”
  • RBC: “BoC’s preferred CPI trim and CPI median both dropped lower on a monthly basis although the narrower “supercore” measure held slightly higher. Yesterday’s second quarter release of the BoC’s Business Outlook Survey largely confirmed further normalizing in a few key areas that the central bank has deemed critical to future inflation trends […]. All told, we expect the BoC will carry on with easing the monetary brakes on a weak economy, and follow up with another rate cut at its July meeting next week.”