CIBC Research discusses its reaction to today's Canada CPI print for the month of April.
"What goes up...must keep going up it appears, as Canadian inflation accelerated further to 6.8% in April, from 6.7% in the prior month and against consensus expectations for an unchanged reading. Food prices, as expected, were a key driver of inflation, as was shelter costs...The 0.5% seasonally adjusted gain in CPI excluding food and energy remains well above the trend consistent with a 2% inflation target, and the average of the Bank of Canada's three core measures also moved up to 4.2%, from 3.9% in the prior month," CIBC notes.
"With gasoline and agricultural prices still on the rise, headline inflation could well accelerate again in May before finally slowing in the second half of the year and into 2023. With inflation continuing to accelerate further above its MPR forecasts, the Bank of Canada remains well on course to deliver another 50bp hike at its next meeting," CIBC adds.