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Monthly Inflation Cools Slightly But Still Above Target

CANADA DATA
  • Monthly rates of more traditional measures of core CPI inflation broadly stabilised in M/M terms having cooled notably from the spike in the spring. It adds to another month of softer inflationary pressure but not yet quite back to a level consistent with the 2% target, and helps OIS now price a 24bp hike for next week from 21bp prior.
  • Ex food & energy edged back from 0.35% to a seasonally adjusted 0.28% M/M in Dec, where it’s been in three of the past five months before inching slightly higher in between.
  • Alternatively, excluding the eight most volatile items, monthly inflation edged to the lowest since Mar’21 at 0.20% M/M with the help of indirect taxes, whilst adjusting for indirect taxes it held at 0.27% M/M, still off the October low of 0.20%.

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