Canada Core Inflation Rate YoY

Info

History

Chart

Impact:

High

Source: Statistics Canada

Next Release:

Date:

Forecast: 2.9%

Period: Jun

What Does It Measure?

The Canada Core Inflation Rate YoY measures the annual change in prices for a basket of goods and services, excluding volatile items such as food and energy. Its primary focus is to provide insight into underlying inflation trends by assessing price stability while key indicators include consumer expenditures, housing costs, and services.

Frequency

This indicator is released monthly, with its initial estimates being reported shortly after the end of each month, providing timely information to market participants.

Why Do Traders Care?

Traders closely monitor the Core Inflation Rate as it has significant implications for monetary policy decisions made by the Bank of Canada, directly impacting interest rates and currency valuation. Higher-than-expected inflation figures can strengthen the Canadian dollar and bolster equity markets, while weaker readings may have a negative effect.

What Is It Derived From?

The Core Inflation Rate is derived from the Consumer Price Index (CPI), which is calculated through surveys that track prices across a wide range of categories and considers both monthly price changes and seasonal adjustments. The calculation employs the geometric mean and weighting methods to reflect consumer purchasing patterns accurately.

Description

The Core Inflation Rate is released as a preliminary estimate and is subject to revisions before reaching its final figure, which reflects a more accurate data assessment. Financial markets react promptly to the preliminary release, as it indicates potential shifts in economic conditions, while revisions may lead to adjustments in market sentiment if the final data deviates significantly from initial estimates.

Additional Notes

This indicator serves as a leading economic measure, providing critical insights into inflationary pressures which can influence consumer behavior and central bank policies. Additionally, trends in the Core Inflation Rate are compared against forecasted inflation targets set by the central bank, allowing for evaluation of economic health relative to historical norms.

Bullish or Bearish for Currency and Stocks

Higher than expected: Bullish for CAD, Bullish for Stocks. Lower than expected: Bearish for CAD, Bearish for Stocks. Hawkish tone: Signaling higher interest rates due to inflation concerns, is usually good for the CAD but bad for Stocks due to higher borrowing costs.

Legend

High Potential Impact
This event has a strong potential to move markets significantly. If the 'Actual' value differs enough from the forecast or if the 'Previous' value is significantly revised, it signals new information that markets may rapidly adjust to.

Medium Potential Impact
This event may cause moderate market movement, especially if the 'Actual' deviates from the forecast or there's a notable revision to the 'Previous' value.

Low Potential Impact
This event is unlikely to affect market pricing unless there's an unexpected surprise or a major revision to prior data.

Surprise - Currency May Strengthen
Actual deviated from Forecast on a medium or high impact event and historically could strengthen the currency.

Surprise - Currency May Weaken
Actual deviated from Forcast on a medium or high impact event and historically could weaken the currency.

Big Surprise - Currency More Likely To Strengthen
'Actual' deviated from 'Forecast' more than 75% of historical deviations on a medium or high impact event and may likely strengthen the currency.

Big Surprise - Currency More Likely To Weaken
'Actual' deviated from 'Forecast' more than 75% of historical deviations on a medium or high impact event and may likely weaken the currency

Green Number	Better than forecast for the currency (or previous revise better)
Red Number	Worse than forecast for the currency (or previous revise better)
Hawkish	Supports higher interest rates to fight inflation, strengthening the currency but weighing on stocks.
Dovish	Favors lower rates to boost growth, weakening the currency but lifting stocks.

Date	Time	Actual	Forecast	Previous	Surprise