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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
CANADA DATA
- Headline CPI came in above all analyst estimates in May as it accelerated to 2.9% Y/Y (cons 2.6) after 2.7%.
- Core (av of median & trim) beat expectations by 0.15pps as it accelerated from a marginally downward revised 2.7% to 2.85% Y/Y.
- As shown above, the 3-month core rate accelerated to a seasonally adjusted 2.5% annualized rather than the circa 2% figure implied by a few analyst estimates seen beforehand.
- The 6-month rate also increased a tenth to 2.4% annualized but it’s worth noting that these are still the fourth consecutive month that both metrics have been within the BoC’s 1-3% target band.
- Recall the difference with the US here, with 6-mth Canadian core inflation still running under the Y/Y rates vs six-month core PCE possibly set for a fourth month in excess of its Y/Y.
- As noted in our preview, we put more focus on these core measures as they should be less impacted by the new weights with this month’s data, which boosted the weight on shelter in particular.
- That said, both CPIxFE and CPIX saw sizeable accelerations over three months (to 3.2% and 2.1% respectively) but with much more measured one tenth increases over six months (to 2.4% and 1.2%).
- Alternatively, giving an equal weight to median, trim, CPIxFE and CPIX, our very crude measure of “underlying” inflation accelerated from 2.4% to 2.6% Y/Y in May vs 2.7% to 2.8% Y/Y for the BoC’s preferred core.
- The report adds weight to some important releases still to be seen before the Jul 24 decision including the June labour report (Jul 5), Q2 BOS/CSCE surveys (Jul 15) and June CPI (Jul 16).
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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