Canada: Headline CPI likely to firm to 2.0% in April - TDS

Analysts at TD Securities are looking for the Canada’s headline CPI to firm to 2.0% y/y in April, leaving inflation at target for the first month since December.

Key Quotes

“Our forecast is consistent with a 0.4% m/m increase, helped by a broad pickup in energy prices on the heels of the federal carbon backstop imposed on Ontario, Saskatchewan, Manitoba and New Brunswick on April 1st.”

“Looking past energy prices, we expect CAD depreciation to provide a tailwind to food products while ex. food and energy prices should see a soft 0.1% increase (0.2% seasonally adjusted); BoC measures of core inflation are likely to hold at 2.0% on average.”