CIBC Research discusses its reaction to today's Canada CPI print for the month of September.
"There will be some long faces at the Bank of Canada this morning as inflation cooled less than in expected. Unadjusted headline CPI increased 0.1% in September, with the annual rate easing only one tick to 6.9% (consensus -0.1%, 6.7% y/y). This is the third consecutive deceleration in headline CPI driven mainly by the fall in gasoline prices. Given that those prices have since reversed, the next month could see headline inflation temporarily heading in the wrong direction again. Meanwhile, food prices continued to rise at a historic pace," CIBC notes.
"The Bank of Canada has clearly not slayed the inflation dragon yet, and is therefore set for another large increase in interest rates of at least 50 bps next week," CIBC adds.