- Prior was 5.2%
- CPI m/m +0.5% vs +0.5% expected
- Prior m/m reading was +0.4%
- Gasoline prices -13.8% vs -4.7% y/y in prior (largest decline since July 2020)
- Gasoline prices -1.2% m/m vs -13.1% prior
- Food +9.7% vs +10.6% y/y prior
- Mortgage interest costs +26.4% y/y vs +23.9% prior
Core measures:
- BOC core y/y 4.3% vs 4.4% expected (4.7% prior)
- BOC core m/m +0.6% vs +0.5% prior
- Median 4.6% vs 4.9% prior
- Trim 4.4% vs 4.8% prior
- Common 5.9% vs 6.4% expected
Canadian yearly CPI has begun to fall rapidly as it hits the y/y comps from a year ago. The Bank of Canada last week forecast that inflation would fall to 3% this summer. What's a tad worrisome is that the latest m/m readings are still showing some heat with back-to-back numbers at +0.5% and +0.4%. Those aren't readings that will add up to 2% if they continued.
USD/CAD is little-moved after the release and down 17 pips to 1.3375 on the day.
CIBC notes that
"Travel tour costs posted their sharpest monthly gain on record (+36.7%) and provided the largest upward contribution to monthly CPI despite having a relatively small weight. The surge was likely driven by the timing of March break and pent-up demand for travel, and so could reverse in the coming months. Air transportation prices (+1.3%) were fairly muted in comparison."
Main contributors to the 1-month change, not seasonally adjusted
Main upward contributors (m/m %)
- Travel tours 36.7
- Mortgage interest cost 2.0
- Purchase of passenger vehicles 1.0
- Electricity 3.1
- Gasoline 1.2
Main downward contributors:
- Fresh vegetables -4.0
- Fuel oil and other fuels -10.3
- Fresh fruit -3.2
- Telephone services -1.6
- Natural gas -2.4
Doesn't this chart speak to the heart of central banking?
