Inflation data in Canada unlikely to bring impulses

Canada's July inflation data is due today. In most other G10 countries, this release would be a highlight. The Bank of Canada, however, has other problems: oil prices are falling again. It seems that it underestimated the effects of this development on Canada's economy at the beginning of the year. Of course, weak US activity also played a role for Canada's sluggish economic performance during the first quarter. 

However, the central bank was surprised by the extent of the decline in investment plans. The renewed oil price decline might delay the recovery, which the BoC is expecting for the second half of the year. In that case, an inflation rate near the target will not be much of a comfort, therefore today's figures is unlikely to have a major impact on the CAD, argues Commerzbank.