MNI BRIEF: Canada Feb CPI Seen as Last Month Before Surge

Canada's inflation rate likely accelerated in February to 1.2% from 1% in January, reflecting just the start of a surge in gasoline prices the central bank expects will take gains to 3% in the next few reports.

The Bank of Canada last week boosted its inflation forecast while saying the gains won't last because it's a mechanical boost in year-over-year comparisons to 2020 when gasoline prices plunged. This is the only CPI report policy makers get before their critical April 21 policy decision where some investors say a strengthening economy will lead the central bank to taper QE asset purchases.

The report Wednesday at 830am EST should also have more information on Statistics Canada's plans to add more data on resale home prices to the CPI, a move that would better reflect the surge in that market. Other details:

• Monthly CPI seen +0.6% for a second month.
• Markets remain skeptical about StatsCan's 3 core inflation rates after the agency had to cancel revisions to the 3 measures last month following complaints.
• Travel tours are another wild card because of difficulties calculating prices for services few people have used over the last year-- last month's figures showed a 31% YOY increase.