Canadian November inflation data
- Prior was +2.1%
- m/m -0.4% vs -0.3% exp
- Prior m/m +0.3%
- CPI index 130.8 vs 131.3 prior
- Ex-gasoline +1.5% vs +1.5% prior
Core measures y/y:
- CPI core common +1.6% vs +1.5% prior
- CPI core trim +1.9% vs +1.8% prior
- CPI median 1.9% vs 1.9% prior
In all, December CPI was weak but it was largely expected because of a 3.3% drop in gasoline. The tick higher in the core measures y/y will keep the BOC on track but drops in clothing (-3% m/m), household furnishings (-1.5% m/m) and 'recreation, education and reading (-1.6% m/m) are concerns.
The initial USD/CAD reaction was choppy but it's now about 20 pips higher at 1.2325 but that's more likely due to solid US data at the same time.
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