BoC Seen Holding Rates as Canada June CPI Slows to 2.9%
Updated
Updated · tmgm.com · Jul 20
BoC Seen Holding Rates as Canada June CPI Slows to 2.9%
2 articles · Updated · tmgm.com · Jul 20
Summary
Canada’s June headline CPI is expected at 2.9% year on year, down from 3.2% in May, reinforcing expectations that the Bank of Canada will keep its hiking pause in place.
Core inflation is seen staying close to target—1.7% excluding food and energy and 2.05% on the trim-median average for a third straight month—helped by lower gasoline prices.
Swaps markets now price less than a 50% chance of a 25-basis-point hike by year-end and only 50 basis points of tightening over the next 12 months.
That path would leave the policy rate near 2.75%, the midpoint of the BoC’s estimated 2.25%-3.25% neutral range, while BBH says anchored inflation remains a headwind for the Canadian dollar.