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BoC's Macklem On Inflation Data

CANADA
  • Front-end GoCs have sold off 1.5bps to 3.325% on BoC Gov. Macklem’s article in the National Post, which didn’t really build on past comments, back closer to a peak of 3.33% seen a couple hours after the strong core CPI prints for July for a +12bp rise on the day. The bear flattening remains in place with 10YY +8bps.
  • “The good news is that it looks like inflation may have peaked.”
  • “The bad news is that inflation will likely remain too high for some time” [but we note that that’s still consistent with prior BoC forecasts of headline averaging 8% through Q3 and 7.5% in Q4].
  • “Even if inflation came down a little in July, prices for more than half of the goods and services that make up the CPI basket are rising faster than five per cent.”
  • “Tuesday's inflation number offers a bit of relief, but unfortunately, it will take some time before inflation is back to normal. We know our job is not done yet - it won't be done until inflation gets back to the two per cent target.”
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  • Front-end GoCs have sold off 1.5bps to 3.325% on BoC Gov. Macklem’s article in the National Post, which didn’t really build on past comments, back closer to a peak of 3.33% seen a couple hours after the strong core CPI prints for July for a +12bp rise on the day. The bear flattening remains in place with 10YY +8bps.
  • “The good news is that it looks like inflation may have peaked.”
  • “The bad news is that inflation will likely remain too high for some time” [but we note that that’s still consistent with prior BoC forecasts of headline averaging 8% through Q3 and 7.5% in Q4].
  • “Even if inflation came down a little in July, prices for more than half of the goods and services that make up the CPI basket are rising faster than five per cent.”
  • “Tuesday's inflation number offers a bit of relief, but unfortunately, it will take some time before inflation is back to normal. We know our job is not done yet - it won't be done until inflation gets back to the two per cent target.”