Sun, May 19, 2024

CAD: Canadian CPI Accelerates in March

The Canadian CPI data for the month of March came at 2.9% versus 2.8% printed in February month. Shelter and transportation costs contributed higher, Services, Mortgage costs also higher in the March month. Core CPI stands at 2.0% and monthly basis up by 0.60% versus 0.30% previous month printed. Mixed bags of Canadian CPI data moved Canadian Dollar down against Counter pairs.

USDCAD is moving in Ascending channel and market has reached higher high area of the channel

USDCAD is moving in Ascending channel and market has reached higher high area of the channel

In March, Canada’s inflation, as gauged by the Consumer Price Index (CPI), accelerated to 2.9% year-over-year, up from 2.8% in February, according to data released by Statistics Canada on Tuesday. This figure surpassed market expectations. On a monthly basis, the CPI saw a 0.6% increase.

The annual Core CPI, which excludes volatile food and energy prices, also saw an uptick, rising by 2.0% in the same period.

CPI

Statistics Canada highlighted that in March, shelter prices notably contributed to the upward pressure on inflation, with both mortgage interest costs and rent indexes being major factors in the year-over-year increase in the all-items CPI. Moreover, the report stated, “Prices for services (+4.5%) continued to rise in March compared with February (+4.2%), driven by air transportation and rent, outpacing price growth for goods (+1.1%) which slowed compared with February (+1.2%) on a yearly basis.”

CAD: Canada’s March inflation hits 2.9%, fueling rate-cut speculation

The Canadian CPI data for the month of March came at 2.9% versus 2.8% printed in February month. Shelter and transportation costs contributed higher, Services, Mortgage costs also higher in the March month.Core CPI stands at 2.0% and monthly basis up by 0.60% versus 0.30% previous month printed. Mixed bags of Canadian CPI data moved Canadian Dollar down against Counter pairs.

GBPCAD has broken Descending channel in Upside

GBPCAD has broken Descending channel in Upside

The annual inflation rate in Canada climbed to 2.9 percent in March, marking a slight uptick from the previous month. Statistics Canada released data indicating that rising gasoline prices primarily drove this increase, surging by 4.5 percent year-over-year. Excluding gasoline, the Consumer Price Index (CPI) still saw a notable rise of 2.8 percent.

On a monthly basis, CPI recorded a 0.6 percent increase in March, while seasonally adjusted, it rose by 0.3 percent. Economists had anticipated a similar 2.9 percent rise in CPI for March, following February’s 2.8 percent increase.

Canadian Dollar Oil Prices higher

However, the Bank of Canada’s core measures of inflation displayed a cooling trend in March. The CPI-median indicator moderated to a 2.8 percent annual increase from February’s 3 percent, while the CPI-trim measure edged down to 3.1 percent annually from 3.2 percent in the previous month.

This modest uptick in inflation supports the possibility of a rate cut by the Bank of Canada in June. BMO chief economist Douglas Porter noted that this outcome aligns with expectations, suggesting that the central bank might proceed with caution pending sustained evidence of progress, particularly concerning core inflation.

Governor Tiff Macklem emphasized the need for sustained progress in inflation control, cautioning against hasty decisions based on temporary fluctuations. The federal government’s forthcoming budget announcement and the next CPI release will play crucial roles in shaping monetary policy decisions.

Market indicators revealed an increased expectation of a June rate cut following the CPI data release, with bets rising to over 50 percent from 44 percent beforehand. Analysts highlighted the significance of downward momentum in core measures, signaling a potential rationale for imminent rate adjustments.

In addition to fuel prices, rising shelter costs significantly contributed to the March inflation surge. Shelter prices, including mortgage interest and rent, rose by 6.5 percent annually. Food prices also witnessed an uptick, with grocery store purchases increasing by 1.9 percent annually, driven by higher meat and bakery product costs.

The dynamics of inflation and monetary policy decisions will be closely monitored in the coming months, particularly against the backdrop of economic recovery efforts and ongoing fiscal measures.

CAD: Canada’s March CPI: 2.9% with Core Inflation Easing

The Canadian CPI data for the month of March came at 2.9% versus 2.8% printed in February month. Shelter and transportation costs contributed higher, Services, Mortgage costs also higher in the March month.Core CPI stands at 2.0% and monthly basis up by 0.60% versus 0.30% previous month printed. Mixed bags of Canadian CPI data moved Canadian Dollar down against Counter pairs.

EURCAD has broken Descending channel in upside

EURCAD has broken Descending channel in upside

Canada’s March CPI: 2.9% as Core Inflation Eases

Canada’s annual inflation rate rose to 2.9% in March, in line with expectations, while core inflation measures continued to ease for the third consecutive month, according to data released on Tuesday. Analysts surveyed by Reuters had predicted a rise in inflation from February’s 2.8% to 2.9%. On a monthly basis, the consumer price index (CPI) increased by 0.6%, marking the largest uptick since July 2023 but falling short of the forecasted 0.7% gain.

The acceleration in the annual inflation rate was primarily driven by higher fuel prices at the pump, as global crude prices surged due to supply concerns and voluntary production cuts. Excluding gasoline, inflation slowed to 2.8% from 2.9% in February.

The Bank of Canada (BoC), aiming to bring inflation down to its 2% target, opted to maintain its key interest rate at a near 23-year high of 5% last week. However, the central bank hinted at the possibility of a rate cut in June if the downward trend in inflation persists.

Following the release of the inflation data, the Canadian dollar depreciated to a five-month low against the U.S. dollar, reaching C$1.3820 per U.S. dollar. Market expectations for a rate cut in June increased to over 50% from 44% prior to the data release.

Headline inflation has remained below 3% since January, aligning with the BoC’s forecast for it to remain close to 3% in the first half of 2024. The BoC’s preferred measures of underlying inflation, CPI-median and CPI-trim, both fell more than expected. CPI-median decreased to 2.8% from 3% in February, while CPI-trim declined to 3.1% from 3.2%.

Canada Global energy

The BoC had raised rates by 475 basis points to a 22-year high between March 2022 and July 2023 and has maintained them at that level for six consecutive meetings. The central bank’s next rate announcement is scheduled for June 5, with April data available for consideration.

In March, shelter prices continued to exert upward pressure, with mortgage interest costs and rent indexes contributing the most to the year-over-year gain in the all-items CPI. Services inflation accelerated to 4.5% from 4.2% in February, driven by air transportation and rent, while goods inflation slightly slowed to 1.1% from 1.2%. Excluding volatile food and energy prices, prices rose 2.9% compared to a 2.8% increase in February.


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