CPI Canada Preview: Inflation likely stagnated in November

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Dec 18, 2015.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    FXStreet (Mumbai) - Inflation in Canada is estimated to have stagnated in November. Year on year, the consumer price index is believed to have risen 1.5 per cent as against 1 per cent recorded earlier. Core CPI can be expected to rise by 0.3% on a month-over-month basis in October. If the final figures comes in as estimated it will match the monthly increase a year ago, which will to leave the year-over-year rate of core price growth unchanged at 2.1%. Some analysts however expect year on year core CPI to slip to 2 per cent compared to 2.1 per cent previously seen.

    The month-over-month change in core prices is possibly the result of seasonal increases in motor vehicle (1.8%) and clothing (1.2%) prices. These factors have likely found additional support from the impact of depreciation in the Canadian dollar.

    If headline CPI actually moved up 0.1% in October, matching expectations then it would likely succeed in pushing the year-over-year rate of growth up modestly to 1.1% from 1.0% in September.

    Inflation was unchanged in October at 1.0% for the second month in a row and matching market expectations. Headline monthly increase was hurt in October by a 2.3% drop in gasoline prices. Annual average inflation in October was 1.2%, down from 1.3% in September. It is evident from the figures that inflation is steady at the lower bound of the Bank of Canada’s target range of 2 per cent.

    The Bank of Canada expects headline inflation to average 1.2% for 2015, according to its October Monetary Policy Report. average inflation is expected to rise 1.5% in 2016.
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