Bonds & Rates
Home›Bonds & Rates›Economy›Canada CPI seen easing as energy price drop cools head…
Canada CPI seen easing as energy price drop cools headline inflation
TD Securities expects June headline CPI to fall 0.2% month over month, with gasoline and other energy products shaving about 0.4 percentage points from the monthly print.
TD Securities forecasts Canada’s headline CPI will cool in June, projecting annual inflation of 2.9% year over year, alongside a 0.2% month over month decline. The firm links the pullback mainly to sharply lower energy prices, particularly gasoline and other energy products, which it expects to deliver the largest drag on the headline figure.
In its outlook, core inflation measures such as CPI-trim and CPI-median are forecast to stay near 2.0%, supported by ongoing shelter disinflation. TD Securities says shelter pressures should remain a source of cooling, with disinflation spanning rents, mortgage interest costs, and utilities.
TD Securities also projects food inflation will provide some offset, noting higher producer prices and a tailwind from a softer Canadian dollar. Overall, the firm expects gasoline and other energy products to shave about 0.4 percentage points from the headline print on a monthly basis while contributing about 1.0 percentage point to year-ago inflation.
Looking at central bank implications, TD Securities says a 2.9% June print would keep headline CPI broadly aligned with Bank of Canada projections. It adds that the recent oil pullback could give the Bank more room to look through potential upside surprises in core measures, while further deceleration could raise questions about the policy stance if stronger GDP growth does not follow.
Latest closeGasoline (RBOB) $3.114 ▼5.7%