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Dovish Reaction Supported By Softer M/M Inflation Rates

CANADA DATA
  • In M/M terms, traditional core (ex food & energy) drops from 0.35% to 0.14% M/M in January, the first time below the rate consistent with the 2% target since Jun’21.
  • The alternate category of ex 8 most volatile and indirect taxes dips from 0.27% to 0.07% M/M.
  • No change in the latest readings for the Bank’s preferred Trim and Median figures though, at 0.3% M/M backed out from the newly published SA indexes.
  • USDCAD continued its push higher touching a high of 1.3501 (+45 pips), currently 1.349, but still within resistance at 1.3537 (Feb 17 high). 2Y GoCs pare the initial rally but still -6.5bps on the release for +1bp on the day.

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