MNI DATA IMPACT: Canada March CPI +1.9% Y/Y, Core Picks Up>

By Yali N'Diaye

     OTTAWA (MNI) - The following are the key points from the March data 

on the Canadian CPI released Wednesday by Statistics Canada: 

     - Headline unadjusted CPI rose at a steady pace of 0.7% on the 

month, as expected by the market and analysts in a MNI survey. On a 

seasonally adjusted basis, CPI was up 0.3% on the month, and 0.2% 

excluding food and energy. 

     - Increases were recorded in all major categories except for a 0.1% 

decline in household operations, furnishings and equipment. The largest 

upward contributor was gasoline, with a monthly gain of 11.6%, the 

largest since March 2007. CPI excluding gasoline was up 0.4%. 

     - On a 12-month basis, the headline CPI accelerated for the second 

consecutive month, rising 1.9% in March after 1.5% in February and 1.4% 

in January. The March readings were in line with market expectations, 

with mortgage interest cost being the largest upward contributor, 

although the 12-month growth pace stabilized at 8.1% after months of 

acceleration. A 4.4% drop in gasoline prices was the largest downward 

contributor. CPI excluding gasoline rose 2.2%. 

     - For the first quarter, year-over-year CPI averaged 1.6%, 

undershooting the Bank of Canada's 1.7% projection, and slowing down 

from 2.0% in the fourth quarter. 

     - The BOC's preferred measures of core inflation picked up to an 

average of 2.0% in March from 1.9% in February, providing a strong 

argument for the BOC to maintain its hiking bias, leaving a rate cut off 

the table. Two of the core measures increased by 0.1 percentage point: 

CPI-trim reached 2.1%, the highest since last October, and CPI-median 

reached 2.0%, the highest since August 2018. 

--MNI Ottawa Bureau; email: yali.ndiaye@marketnews.com 

[TOPICS: M$C$$$,MACDS$]