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MNI Canada CPI Preview: Key Final Input Before Fourth BoC Cut

The CPI report for September comes with markets undecided over a shift up to a 50bp cut from the BoC next week
Bank of CanadaGlobalCentral Bank NewsCanadaMarketsStoryRegionNorth America

Executive Summary

  • The September CPI report is released Tuesday, Oct 15, at 0830ET and should receive little cross-market interference with only the Empire manufacturing survey scheduled for then in the US.  
  • Consensus sees headline CPI easing two tenths to 1.8% Y/Y having returned in August to the target midpoint for the first time since early 2021.
  • The BoC’s preferred core measures meanwhile are seen broadly unchanged at 2.4% Y/Y having come in as expected at 2.35% back in August, whilst a more traditional CPIxFE is seen firmly slightly to 2.5% Y/Y.
  • That combination should see headline undershoot the BoC’s Q3 forecast from June by two tenths but only a marginal miss for the average of median and trim measures.
  • This is the last major release before next week’s October BoC decision and will likely be pivotal in guiding broader expectations. It’s hard to argue with the 38-39bp of cuts priced with two-way sensitivity to the data. 

PLEASE FIND THE FULL NOTE HERE: CanadaCPIPrevOct2024.pdf

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Executive Summary

  • The September CPI report is released Tuesday, Oct 15, at 0830ET and should receive little cross-market interference with only the Empire manufacturing survey scheduled for then in the US.  
  • Consensus sees headline CPI easing two tenths to 1.8% Y/Y having returned in August to the target midpoint for the first time since early 2021.
  • The BoC’s preferred core measures meanwhile are seen broadly unchanged at 2.4% Y/Y having come in as expected at 2.35% back in August, whilst a more traditional CPIxFE is seen firmly slightly to 2.5% Y/Y.
  • That combination should see headline undershoot the BoC’s Q3 forecast from June by two tenths but only a marginal miss for the average of median and trim measures.
  • This is the last major release before next week’s October BoC decision and will likely be pivotal in guiding broader expectations. It’s hard to argue with the 38-39bp of cuts priced with two-way sensitivity to the data. 

PLEASE FIND THE FULL NOTE HERE: CanadaCPIPrevOct2024.pdf

Keep reading...Show less