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Josh Nye, senior economist at the Royal Bank of Canada, points out that the Canada’s headline CPI rose to 2.2% YoY in November, a six-month high while BoC’s core CPI measures averaged a cycle-high 2.2%.

Key Quotes

“The jump in headline inflation in November was mostly due to base effects, with energy prices having fallen sharply toward the end of 2018. Inflation should remain above 2% until that decline washes out of the year-over-year calculation (we think around March 2020). That said, there is growing evidence of (an admittedly modest) firming in underlying inflation trends.”

“The BoC’s core measures averaged 2.2% in November, the strongest pace in a decade. And prices for goods excluding food and energy are growing at their fastest rate since a currency-driven increase in 2015-16.”