Canadian headline inflation likely to have accelerated in October

The Canadian consumer price index for the month of October is set to be released tomorrow. According to a TD Economics research report, the headline inflation is likely to have accelerated to 2.4 percent on year-on-year tailwinds from energy and food prices. Airfares have entirely unwound their previous jump and thus pose less risk to the figure this month, though the methodology changes still make the figures uncertain.

The main focus is likely to be on the core measures this month, as the report marks the last inflation print ahead of the December Bank of Canada meeting. Average BoC core dropped to 2 percent and there is risk for a recovery back to 2.1 percent, raising odds of multiple rate hikes in the next three meetings.

“However, headline inflation is still the Bank’s main target, and the latest oil rout leaves inflation tracking below the BoC’s projections at 2.0 percent in Q4 vs 2.3 percent”, added TD Economics.

At 19:00 GMT the FxWirePro's Hourly Strength Index of Canadian Dollar was highly bullish at 131.671, while the FxWirePro's Hourly Strength Index of US Dollar was neutral at -49.3722. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex