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The Canadian Consumer Price Index is set to rise 2.6% YoY in May after April’s 2.7% increase. Canada’s CPI inflation data will likely impact the timing of the next Bank of Canada interest rate cut. Statistics Canada will publish the CPI inflation data at 12:30 GMT on Tuesday. Statistics Canada is set to release the top-tier Consumer Price Index (CPI) data for May on Tuesday at 12:30 GMT. The timing of the Bank of Canada’s (BoC) next interest rate cut will depend on the CPI inflation data, significantly impacting the market’s pricing and the value of the Canadian Dollar. What to expect from Canada’s inflation rate? The Canadian CPI is expected to rise at an annual rate of 2.6% in May, a tad slower than a 2.7% increase in April. On a monthly basis, the CPI inflation is seen easing to 0.3% in the same period after April’s 0.5% growth. The core CPI showed no growth over the month in April. Alongside the CPI data release, the Bank of Canada will publish its closely watched core Consumer Price Index data, which excludes volatile items such as food and energy prices. In May, the annual BoC core CPI inflation is seen steady at 1.6%, while the monthly BoC core CPI is set to rise by 0.2%. Canada’s inflation is likely to stay below 3.0% for the fifth month in a row, although closing in on the central bank’s 2.0% target. Previewing the Canadian inflation report, analysts at TD Securities (TDS) noted: “We look for headline CPI to rise by 0.3% in May on another large increase for shelter as inflation edges lower to 2.6% YoY.” “Core inflation measures should hold stable at 2.9%/2.6% for CPI-trim/median, translating to a modest acceleration on a 3M (SAAR) basis, but we do not expect the…

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Filed under: News - @ June 25, 2024 8:18 am