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Headline CPI Misses, Core Mixed

CANADA
  • Headline CPI inflation misses, rising from 7.7% to 8.1% Y/Y (cons. 8.4%) as it comes in near the bottom of the wide analyst range.
  • Average core CPI inflation ended up rising as expected to a new cycle high of 5.0% Y/Y with a 0.1pp rise instead of the +0.25pp expected after a strong upward revision, but there revisions weren’t split evenly.
  • CPI-common (more tilted to services) increased a further tenth to 4.6% Y/Y after a very large +0.6pp upward revision to May, whilst median and trim measures disappointed, with median unchanged at 4.9% Y/Y (cons. 5.1%) and trim only rising a tenth to 5.5% Y/Y (cons. 5.6%).
  • GoCs quickly reverse earlier underperformance to USTs whilst USDCAD extends an earlier rise on Russia escalation comments and now sits +0.2% at 1.2899 having previously dipped under important support at the 50-day EMA.

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