Canada: No pressure on BoC for further easing – ING

By FXStreet FXStreet (Delhi) – James Knightley, Senior Economist at ING, suggests that the recent inflation figures of Canada are consistent with BoC targets, and as a result there will be no alteration to the Bank of Canada’s policy stance in the next monetary policy meeting in October.

Key Quotes

“Canadian annual inflation was in-line with consensus forecasts at 1.3% YoY, remaining unchanged from July’s figure as well as a slight rise in the MoM figure by 0.2%.”

“The effect of continuing lower energy prices have been offset this month by higher consumer food prices (3.6%) and clothing and footwear (2.1%). The consequences of a weakening CAD over the summer months has led to the re-pricing of consumer items and prices increased in seven out of the eight components of Canadian CPI.”

“Consequently, this month’s core CPI figure dropped a sizeable 0.3ppt from last month, leaving annual inflation at 2.1%. This is well within the Bank of Canada’s expectations to hit a figure of 2.0% in 3Q15 (MPR July-15). However, since the start of September-15, there has been a 4.1% fall in Brent crude prices, thus external and domestic risks (such as a larger decline in investment in the oil and gas sector) are …read more

Source:: FX Street