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CANADA: MNI CPI Preview: Headline Seen Firming Back Near Target Mid-Point

CANADA
GlobalCanadaBulletMarketsFixed Income BulletsForeign Exchange BulletsRegionNorth America
  • The Canada October CPI report is released Tuesday, Nov 19, at 0830ET and should again receive only modest cross-market interference with US data limited to housing starts/building permits at that time.  
  • Consensus sees headline CPI firming three tenths to 1.9% Y/Y, back close to the 2% target mid-point having dipped below it in September for the first time (on a rounded basis) since early 2021.
  • The BoC’s preferred core measures meanwhile are seen broadly unchanged at 2.4% Y/Y after 2.35% Y/Y, whilst a more traditional CPIxFE is seen easing to circa 2.2% Y/Y after two months at 2.36% Y/Y.  
  • Headline CPI should be left tracking a little below the 2.1% the BoC forecast for Q4 but with core a touch higher than the 2.3% forecast.  
  • This is the only CPI release between Oct and Dec BoC meetings. Markets lean fractionally in favour of a reversion to a 25bp cut rather than a second 50bp cut but it’s still broadly a 50/50 call at this stage.
  • CAD net shorts and Can-US 2Y yield differentials are historically stretched ahead of the data. 

See the full report here: CanadaCPIPrevNov2024.pdf

 

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  • The Canada October CPI report is released Tuesday, Nov 19, at 0830ET and should again receive only modest cross-market interference with US data limited to housing starts/building permits at that time.  
  • Consensus sees headline CPI firming three tenths to 1.9% Y/Y, back close to the 2% target mid-point having dipped below it in September for the first time (on a rounded basis) since early 2021.
  • The BoC’s preferred core measures meanwhile are seen broadly unchanged at 2.4% Y/Y after 2.35% Y/Y, whilst a more traditional CPIxFE is seen easing to circa 2.2% Y/Y after two months at 2.36% Y/Y.  
  • Headline CPI should be left tracking a little below the 2.1% the BoC forecast for Q4 but with core a touch higher than the 2.3% forecast.  
  • This is the only CPI release between Oct and Dec BoC meetings. Markets lean fractionally in favour of a reversion to a 25bp cut rather than a second 50bp cut but it’s still broadly a 50/50 call at this stage.
  • CAD net shorts and Can-US 2Y yield differentials are historically stretched ahead of the data. 

See the full report here: CanadaCPIPrevNov2024.pdf