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MNI Canada CPI Preview: Consensus For Core Could Still See June Rate Cut Odds Build

The April CPI report lands at a key point with markets undecided between a first BoC cut in June or July

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EXECUTIVE SUMMARY

  • Consensus sees headline CPI two tenths to 2.7% Y/Y for a fourth month within the 1-3% target range.
  • The BoC’s preferred core CPI measures are seen slowing 0.15pps to 2.8% Y/Y having surprised lower in the past three months.
  • The three-month rate for these core measures should bounce closer to 2% from a particularly soft 1.3% in March, whilst the six-month should lift modestly to 2.4-2.5% but remain easily below 3% for a third month.
  • Markets price just under 50% odds of a June cut. This could rise even with a consensus print for core measures on the realization of another month within the 1-3% target range, but expect particular sensitivity to a beat.

PLEASE FIND THE FULL REPORT HERE:

CanadaCPIPrevMay2024.pdf

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EXECUTIVE SUMMARY

  • Consensus sees headline CPI two tenths to 2.7% Y/Y for a fourth month within the 1-3% target range.
  • The BoC’s preferred core CPI measures are seen slowing 0.15pps to 2.8% Y/Y having surprised lower in the past three months.
  • The three-month rate for these core measures should bounce closer to 2% from a particularly soft 1.3% in March, whilst the six-month should lift modestly to 2.4-2.5% but remain easily below 3% for a third month.
  • Markets price just under 50% odds of a June cut. This could rise even with a consensus print for core measures on the realization of another month within the 1-3% target range, but expect particular sensitivity to a beat.

PLEASE FIND THE FULL REPORT HERE:

CanadaCPIPrevMay2024.pdf