Canada CPI inflation YoY 1.9% vs 1.9% estimate. MoM 0.1% versus 0.1% estimate

• Prior month 1.9%
• CPI MoM 0.1% versus 0.1% estimate. Prior month -0.4%
• Core CPI MoM 0.4% versus -0.3% last month
• CPI YoY 1.9% versus 1.9% estimate
• Core CPI YoY 2.1% versus 1.8% last month
• CPI Median YoY 2.7% versus 2.5% estimate. Last month 2.6% revised from 2.4%
• CPI Trim 2.7% versus 2.6%. Last month 2.5%
• CPI Commopn 2.2% versus 2.0% last month

In January, rising energy prices, particularly gasoline and natural gas, drove inflation higher, though this was partially offset by price declines due to the GST/HST tax break. Food prices fell 0.6% year-over-year, the first annual decline since 2017, led by a record 5.1% drop in restaurant food prices.

Energy prices rise:

Energy prices rose 5.3% year-over-year in January, accelerating from 1.0% in December, driven by higher gasoline and natural gas prices. Gasoline prices increased 8.6% YoY, up from 3.5% in December, with Manitoba (+25.9%) seeing the sharpest rise due to the partial reintroduction of its provincial gas tax. Natural gas prices rose 4.8% YoY in January, rebounding from a 5.5% decline in December, with the largest monthly increase in British Columbia (+12.8%).

The money markets are now pricing:

• 8 bps of cut for next meeting vs 11 bps before the announcement
• For the end of year, the markets are pricing 41 bps of cutsvs 45 before the release

This article was written by Greg Michalowski at www.forexlive.com.