Canada's headline CPI rose to 3.1% in September, driven by gasoline, but missed forecasts. All three Bank of Canada core measures eased, and the Canadian dollar firmed after the release.
Canada's headline CPI accelerated to 3.1% year on year in September from 3.0% in August, below market expectations of 3.2%. On a monthly basis, CPI rose 0.1%, undershooting expectations for a 0.2% increase.
Gasoline lifts the headline figure
According to Statistics Canada, gasoline inflation accelerated from 22.8% to 27.8% year on year, while overall energy inflation strengthened from 15.4% to 19.0%. ActionForex links the energy rise to higher crude oil prices amid the ongoing Middle East conflict.
Excluding gasoline, however, CPI slowed from 2.4% to 2.2%. Reuters reported that the print pushed the consumer price index above the Bank of Canada's upper limit once again after three months.
Core measures ease across the board
Underlying inflation moved the other way. CPI-common declined from 2.6% to 2.4%, CPI-median slipped from 2.0% to 1.9%, and CPI-trim moderated from 1.9% to 1.8%, and all three undershot expectations.
Grocery inflation also slowed, from 2.8% to 1.7%, its weakest annual increase since May 2024. Shelter inflation partly offset that, accelerating from 1.5% to 1.8%. Rent inflation was unchanged at 2.8%.
Canadian dollar firms ahead of the BoC decision
The September report is the last CPI data before the Bank of Canada's policy decision later this month, Reuters said. Money markets are betting that the BoC will hold its rate at 2.25% on October 28. They also price in a 25 basis point rate hike in December.
The Canadian dollar firmed after the data, trading up 0.29% at C$1.4096 to the US dollar.
Sources: ActionForex, Investing.com (Reuters)
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