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RBC Watching Recent M/M Growth For CPI

CANADA
  • RBC are at the low end of a tight consensus calling for 2.9% Y/Y (cons 3.0%), helped by gasoline levels running 20% below June 2022 levels.
  • Food prices will not outright decline but the rate of growth in grocery prices has been decelerating in recent months, although mortgage interest costs have continued to surge (a record +30% Y/Y as of May).
  • The BoC will be focused on more recent M/M growth in the range of ‘core’ measures, and growth in those has been stickier at rates still above the BoC target.
  • The BoC’s preferred median and trim CPI measures have been tracking in the range of 3 ½% to 4% at an annual rate and core services excluding shelter (BoC ‘super-core’) has been running closer to 5%.

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