Canada Inflation Rate MoM

Info

History

Chart

Impact:

High

Source: Statistics Canada

Next Release:

Date:

Period: Jun

What Does It Measure?

The Inflation Rate measures the percentage change in the overall price level of a basket of goods and services consumed by households within a specific period. It focuses primarily on consumer price changes, assessing key areas such as housing, transportation, and food, and is typically considered a national indicator.

Frequency

The Inflation Rate is released monthly, with the report typically published on the third or fourth week of the following month. It is important to note that this data can include preliminary estimates that may be revised in subsequent reports.

Why Do Traders Care?

Traders monitor the Inflation Rate closely as it influences monetary policy decisions by central banks, impacting interest rates and market forecasts. A higher-than-expected inflation figure can lead to a stronger Canadian dollar (CAD) and bullish market sentiment for equities, while lower readings might have the opposite effect.

What Is It Derived From?

The Inflation Rate is derived from the Consumer Price Index (CPI), which is calculated based on a survey of prices collected through various means, including retail surveys and price checks across a wide array of goods and services. The index employs a weighted average to reflect the relative importance of items in the typical consumer's expenditure.

Description

The release of the Inflation Rate can be in two forms: preliminary and final reports. Preliminary data, based on early estimates, is subject to future revisions and often influences immediate market reactions; final data provides a more accurate depiction after revisions are made but is released later. The Inflation Rate’s Month-over-Month (MoM) reporting allows traders to observe short-term price changes, indicating trends and potential shifts in economic behavior.

Additional Notes

The Inflation Rate serves as a coincident economic measure, reflecting current economic conditions and consumer spending habits. It is closely watched alongside other indicators, such as GDP growth and employment statistics, to assess broader economic health within Canada, and can also be compared globally to gauge inflationary pressures across different economies.

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. The event indicates tightening inflation concerns, signaling potential higher interest rates, which is usually good for the CAD but can be 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