Canadian CPI to drop sharply in July – Scotiabank

The Scotiabank analysts offer a sneak peek into what to expect from Wednesday’s Canadian Consumer Price Index (CPI) report slated for release at 1230 GMT.

Key Quotes:

“A sharp drop in inflation for the month of July is likely … Headline CPI is likely to decelerate by a half percentage point to 1.5% y/y. 

A shift in year-ago base effects combined with little by way of typical seasonal influences and a small rise in gasoline prices are expected to push overall seasonally unadjusted prices up by just 0.1% m/m.

The bigger issue may be what happens to 'core' inflation, measured as the average of the BoC's three central tendency measures. It has been floating around the 2% target mid-point of the 1-3% policy range.”