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CANADA DATA: Three-Month Run Rates At Or Below 2% Target Mid-Point

CANADA DATA
GlobalCanadaData BulletBulletMarketsFixed Income BulletsForeign Exchange BulletsRegionNorth America
  • The broad suite of Canadian core CPI measures add some modest undershoot risk on a three-month rolling basis, although they remain within the BoC’s 1-3% target band.  
  • Both CPIX and CPIxFE remained at a low 1.6% annualized for a second month running, whilst the average of the BoC’s preferred median and trim inflation eased from 2.3% to 2.1% annualized (its lowest since a soft patch in Apr/May).
  • Six-month run rates remain slightly stronger, with CPIX holding at 1.8% annualized, CPIxFE at 2.3% and trim/median at 2.4% - those are all unchanged from August.
  • The picture is mixed relative to July, the last CPI data the BoC had access to before its Sep decision: three-month run rates are weaker across the board, but six-month rates have on balance firmed slightly.
  • As for BoC forecasts, headline averaging 2.04% Y/Y in Q3 (1.6% in Sept) is notably below the 2.3% forecast in July, but core, i.e. trim and median, inflation was much closer with 2.43% Y/Y (2.35% Sept) vs 2.5% forecast. More timely run rates do however point to further moderation ahead with risk the BoC’s Q4 forecast of 2.4% Y/Y is too high. 
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  • The broad suite of Canadian core CPI measures add some modest undershoot risk on a three-month rolling basis, although they remain within the BoC’s 1-3% target band.  
  • Both CPIX and CPIxFE remained at a low 1.6% annualized for a second month running, whilst the average of the BoC’s preferred median and trim inflation eased from 2.3% to 2.1% annualized (its lowest since a soft patch in Apr/May).
  • Six-month run rates remain slightly stronger, with CPIX holding at 1.8% annualized, CPIxFE at 2.3% and trim/median at 2.4% - those are all unchanged from August.
  • The picture is mixed relative to July, the last CPI data the BoC had access to before its Sep decision: three-month run rates are weaker across the board, but six-month rates have on balance firmed slightly.
  • As for BoC forecasts, headline averaging 2.04% Y/Y in Q3 (1.6% in Sept) is notably below the 2.3% forecast in July, but core, i.e. trim and median, inflation was much closer with 2.43% Y/Y (2.35% Sept) vs 2.5% forecast. More timely run rates do however point to further moderation ahead with risk the BoC’s Q4 forecast of 2.4% Y/Y is too high.