Canada:  Core inflation right on target - NBF

According to National Bank of Canada analyst, Matthieu Arseneau, the Consumer Price Index jumped in October in Canada but warns core inflation remains tame. 

Key Quotes:

“Inflation came in significantly above expectations in October. However, one should not pay too much attention to the 0.3% rise in the headline number or the 0.4% jump in prices for all-items excluding food & energy (seasonally adjusted). Indeed, these were caused by atypical increases in specific components such as mortgage interest cost and air transportation (components that have been subjected to new methods of calculation this year) as well as auto prices and fuel oil.”

“The Bank of Canada’s preferred core measures on a year on year basis were as follows: CPI-trim (2.1%), CPI-median (2.0%) and CPI-common (1.9%), the latter being in line with what was expected by consensus.”

“The Bank of Canada’s preferred measures of core inflation, which are less affected by strong moves in specific components, registered much tamer increases.”

“This morning’s release does not alter our view that the Central Bank is unlikely to hike again before January 2019 at the earliest (assuming financial conditions stabilize by then).”