🇨🇦❗️Cable FX Macro Weekly Note: Canada May Consumer Prices

**As seen in Risk In The Week report 06/22/24, subscribe at cablefxm.co.uk/reports 

Consumer prices eased to 2.7% Y/y in April, this was in line with estimates. The average of the core measures slowed to 2.75% Y/y from the prior 3.05%. Headline prices hit the lowest level since early 2021 before the BoC meeting in June, the disinflationary progress opened the doors for a 25bps rate cut. Economists expect headline prices to ease further in May, the data will help policymakers settle expectations as the June BoC minutes noted some argued for a hold. Separately, Statistics Canada updated the weights to their CPI basket calculations for 2024 with increases showing in transport, food, and shelter prices. Economists at CIBC stand below the market consensus as they expect inflation to slip to 2.5% Y/y in May, they pointed to a deceleration in gasoline and food prices. CIBC sees core measures accelerating on the recent basket calculation changes, however, they added that the BoC could reduce rates again in July with the general disinflationary trend in place. TD Securities expects the Fed-BoC spread to widen to 100-125bps by year-end, and added that this should be reflected in higher USD/CAD.