Notes From the Desk|CAD CPI – Surprised But Not Surprised
CAD CPI for March blew past expectations coming in at a hot 1.4% increase for March (1% expected) bringing the YoY change to 6.7% (6.1% expected).
While food, energy, and shelter costs continue to rise, there are signs of widespread price increases as the average of the Bank of Canada three core inflation measures climbed from 3.5% to 3.8%.
The data is sufficient to warrant another 50bps hike at the next meeting.
The bond market is anticipating the overnight rate to reach 2.5% by the end of the year, so today’s data has done little to move bond yields.