Canada’s annual inflation rate accelerated to 1.1% in February, up from a year-over-year increase of 1.0% in January, on higher gas prices, Statistics Canada said on Wednesday. Analysts polled by Reuters had expected the annual rate to rise to 1.3% in February.
ANDREW KELVIN, CHIEF CANADA STRATEGIST, TD SECURITIES
“It’s obviously a touch weaker than the market had expected but I don’t think this changes the bigger picture. All the repricing (of interest rate expectations) we’ve seen for the Bank of Canada, that relates to growth numbers that have been realized or are expected to be realized soon in addition to the impact of U.S. fiscal stimulus, which can only be positive for Canada.
“Markets were more concerned with the prospects for future inflation in Canada rather than what current inflation was in Canada.”
NATHAN JANZEN, SENIOR ECONOMIST, ROYAL BANK OF CANADA
“It looks close to in line what expectations were. From the Bank of Canada’s perspective, all three of their preferred core measures are still at or below their target range. So I don’t know that it changes a whole lot right now. I think the concern around inflation has been not so much that inflation is getting out of control today. It’s that there could be upward pressure …as demand starts to recover after the pandemic.”
DEREK HOLT, VICE PRESIDENT OF CAPITAL MARKETS ECONOMICS, BANK OF NOVA SCOTIA
“Not much change, a little bit softer than expected. But the main thing is the average core measure ticked down so not a big swing. Generally speaking, you don’t have emergency levels of dis-inflationary pressures to justify emergency levels of stimulus in my opinion.”
-Reuters