🇨🇦Cable FX Macro Weekly Note: Canada February CPI

**As seen in Risk In Week report 03/17/23, subscribe at cablefxm.co.uk/reports

Canadian January consumer prices eased to 5.9% Y/y from a prior 6.3%, the print was below the consensus median of 6.1% and marked the third consecutive month of slowdowns in the series. The average of trim and median core figures slowed to 5.05% Y/y from a prior 5.25%. While the deceleration was recorded on a yearly basis, the M/m figure rebounded from December as the headline showed a +0.5% vs a prior -0.6%. Food prices accelerated to 1.7% M/m vs prior 0.3%, gasoline prices rose to 4.7% M/m vs prior -13.1%. The shelter component slowed to 0.1% M/m vs a prior 0.4%, this was the slowest pace seen since August. Energy and goods inflation recovered vs the prior month to 1.3% and 1.0%, respectively. Services inflation saw a deceleration to 0.1% M/m vs the prior 0.3%. Analysts at BMO wrote that inflation remains at high levels while fiscal policy is providing support to the economy, and that the labour market remains tight. BMO says that the market might be “seriously ill-advised” as they are pricing 75bps of rate cuts this year. On this, the desk warned we are living through the fastest rise in prices in 30 years, and that central banks can’t just reverse their playbooks and cut rates at the first sight of financial stress.