RBC and TD On Today's CPI Report

RBC keep to cut start point around mid-year, whilst TD see scope for dovish pivot in April (having eyed a July hike after the BoC decision earlier this month).

• RBC: “The February report today reaffirmed [trends of broad-based easing in price pressures seen in January]. Different measures of core inflation all decelerated and the diffusion index that measures the scope of inflation pressures also improved. That measure however was still showing slightly broader price pressures than pre-pandemic “norms”, suggesting there’s still room for more improvement. Overall, we continue to [see the BoC starting to lower] interest rates around mid-year.”
• TD: “Details were broadly dovish, with further deceleration across the BoC’s preferred measures of core inflation and indicators of CPI breadth. While this will not be enough for the BoC to contemplate easing in April, it does provide them some additional evidence of softer underlying inflation ahead of their next policy decision” and despite some volatile inflation data “leaves scope for a dovish pivot in their tone in April.”