Canada, Inflation and Interest Rate
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Inflation eased slightly in July, but core measures remain sticky, leaving economists doubtful the Bank of Canada will change course in September.
The Canadian dollar hit its lowest in almost three weeks against its U.S. counterpart on Tuesday as oil prices fell and cooler domestic inflation data raised expectations the Bank of Canada would cut interest rates in the coming months.
Here’s how implied probabilities of future interest rate moves stood in swaps markets moments after the 830 am ET data, according to LSEG data. While the bank moves in quarter-point increments, credit market implied rates fluctuate more fluidly and are constantly changing. Columns to the right are percentage probabilities of future rate moves.
Statistics Canada will issue the Consumer Price Index (CPI) for July on Tuesday. This will attract the market's attention since it will provide the Bank of Canada (BoC) with fresh information on how inflation is changing, which they use to set interest rates.