Canada CPI yy
- Prior was +2.7%
- CPI m/m +0.4% vs +0.4% expected
- Prior m/m -0.1%
Core measures
- CPI Bank of Canada core y/y 1.7% vs 1.9% prior
- CPI Bank of Canada core m/m +0.3% versus -0.1% prior
- Core CPI m/m SA +0.1% vs +0.1% prior
- Median 2.4% versus 2.6% prior
- Trim 2.7% versus 2.9% prior
- Common 2.2% versus 2.3% prior
USD/CAD was trading at 1.3602 just ahead of the release and rose to 1.3619 afterwards on the declines in core inflation. The headline y/y rise is the slowest pace since March 2021. Year-end BOC pricing rose to a full 75 bps from 72 bps.
The overall decline was broad based, stemming from lower prices for travel tours, passenger vehicles and electricity. A 2.4% rise in gasoline prices boosted the m/m reading but will be fleeting given the recent fall in oil prices and cracks.
- Prices for passenger vehicles fell 1.4% year over year in July
- Prices for used vehicles fell 5.7% y/y in July
- Prices for traveller accommodation (-3.7%) and air transportation (-2.7%) fell year over year in July, but both were up m/m
- Prices for shelter rose at a slower rate in July (+5.7%) compared with June (+6.2%)
- The mortgage interest cost index continued to slow year over year, up 21.0% in July compared with 22.3% in June
- Full report
Given that home prices and falling in much of Canada, the only real source of inflation in the country is high interest rates.
