• Prior month 2.3%
• CPI m/m -0.1% versus -0.2% expected. Prior month +0.3%
• Core CPI m/m +0.5% versus +0.1% last month
• Core CPI y/y +2.5% versus 2.2% last month
• CPI Median y/y 3.2% versus 2.9% estimate. Last month 2.9%
• CPI Trim 3.1% versus 2.9% expected Last month 2.8%
• CPI Common 2.5% versus 2.3% last month

The quirk in Canadian CPI data is that there was a GST (Canada’s VAT) holiday that ended on Feb 15 and that has been reverberating, followed by the removal of the carbon tax on April 1, lowering gasoline prices. That contributed to an 18.1% y/y decline in gasoline prices with natural gas prices down 14.1%.

The market was pricing in a 65% chance of a BOC rate cut in early June ahead of this data but that’s quickly back to 51%. These core numbers are uncomfortably hot and may represent some trade war pass-thru.

One source of inflation was in food with grocery stores up 3.8% y/y and restaurant prices up 3.6%.

USD/CAD has quickly fallen to 1.3935 from 1.3960 on the headlines.

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