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CAD CPI Deflates Easing Expectations
Canada’s inflation surprised to the upside yesterday, providing CAD with a boost and further lowering expectations for a cut. At 2% it remains at their centre band of the 1-3% target and, so far, we’ve not seen the ‘inflationary dip’ outlined in July’s MPR and policy statement, so CPI is technically outperforming their expectations for now. As it stands, markets have reduced their expectations for BOC to cut this past week, with the 1-month OIS pricing in around a 15% chance of a cut in September and the 3-month around 30%. Assuming Trump doesn’t take his sledgehammer to the trade war and turn his ire back to Canada, ... (full story)
