**As seen in Risk In The Week report 06/23/23, subscribe at cablefxm.co.uk/reports
April inflation figures rebounded as headline prices rose by 4.4% Y/y from the prior 4.3%, the metric came in higher than the median survey of 4.1%. Core prices accelerated at the same pace, while the average of Trim/Median measure eased to 4.2% Y/y from the prior 4.5%. On the month, food prices increased faster than the prior at 0.4% and shelter inflation saw an increase of 0.6%, the latter came in at the fastest pace since November. April recorded a 6.3% M/m jump in gasoline prices, this came to print the largest monthly increase since October, StatCan warned that a shift to the Summer blend and an increase in carbon levies contributed to the rise. Goods prices increased at 0.8% M/m vs the prior 0.6%, services prices accelerated at the same pace from March at 0.5% M/m. The desk at RBC sees the headline falling to 3.6% Y/y in May, they noted gasoline and fuel oil prices falling by 18% and 36% from a year ago. They flagged May data as crucial for the BoC’s rate path, RBC expects the central bank’s measure of core prices to slow on base effects. We remind you that the BoC ended its rate hike pause in June as it delivered a 25bps lift on the O/N rate, this was the first rate hike since January. On this, RBC warned that it is unlikely that the central bank ended its pause for one single 25bps move, they added that it would take significant downside surprises in both inflation and growth to stop the BoC from hiking again in July.
Comments