Canada: CPI likely to soften to 2.1% in June – TDS


Analysts at TD Securities suggest that the Canadian headline inflation is projected to edge lower by both TD and the wider market after printing at 2.4% y/y in May.

Key Quotes

“TD looks for CPI to soften to 2.1% y/y, reflecting a 0.2% m/m decline in the index, which is slightly above the market consensus (2.0%, -0.3%). Lower gasoline prices will provide the main catalyst for a pullback and are expected to shave roughly 0.3pp from the headline print.”

“Due to the outsized drag from energy, we look for exclusion based core measures (ex food & energy) to hold stable but see downside risks to the Bank of Canada’s preferred measures.”

“Manufacturing sales will be released alongside CPI, with TD looking for a 1.6% advance (market: 2.0%) on a sharp increase in transportation shipments.”

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