Canada February CPI 2.8% y/y vs 3.1% expected

• Prior was 2.9% y/y
• CPI m/m +0.3% vs +0.6% expected

Core measures

• CPI Bank of Canada core y/y +2.1% vs 2.4% prior
• CPI Bank of Canada core m/m +0.1% versus +0.1% prior
• Core CPI MoM SA -0.1% vs -0.1% prior (revised to 0.0%)
• Trim 3.2% versus 3.4% prior
• Median 3.1% versus 3.3% prior
• Common 3.1% versus 3.4% prior (revised to 3.3%)
• Full report

Last month, this report undershot at 2.9% compared to 3.3% expected and now we get another big undershoot. Cell phone prices were down 26.5% y/y with internet prices down 13.2% y/y, so that’s something worth celebrating. Food inflation slowed to 2.4% y/y from 3.4% in January

It’s increasingly clear that the Bank of Canada is facing a different dynamic than the Federal Reserve that calls for lower rates sooner and in the long term.

USD/CAD is up sharply on this report and is threatening the highs of the year.

This article was written by Adam Button at www.forexlive.com.