Analysts On CAD CPI Miss

The below three analysts, who had all looked for a June cut after the BoC earlier this month (the median call of those surveyed at the time), still see a June cut but look for April to pave the way for such a move.

• BMO: “It's difficult to poke any holes in this report. […] April still seems too early to be pulling the trigger on rate cuts, though it can't be entirely ruled out if the BOS shows even more progress. […] At a minimum for April, look for the Bank to open the door to rate cuts. BMO continues to call for a June start to rate cuts, and this report certainly reinforces our conviction.
• CIBC: “This report is clearly encouraging from the BoC’s perspective. It is the last inflation report that policymakers will receive before the April forecast update and announcement, and will allow policymakers room to sound more dovish at that meeting, even though they will likely want to wait to see more evidence of the labour market loosening before pulling the trigger on interest rate cuts in June.”
• Desjardins: “Monetary policymakers will be able to breathe a sigh of relief after seeing these numbers. We had been saying that underlying price pressures were weaker than what the BoC had been estimating, so this doesn’t change our view for upcoming monetary easing. We expect central bankers will sound more dovish in April, thereby setting up a rate cutting cycle beginning in June.”