Canada CPI Preview
Canada CPI Preview: Analysts expect the CPI to fall 0.2% m/m in November after rising 0.2% in October. Total CPI is seen slowing to a 1.4% y/y pace in November from 1.5% y/y in October. A pull-back in gasoline prices is expected to drive the decline in total CPI during November relative to October, contrasting with gasoline price gain in October that lifted CPI. This report will debut three new measures of underlying inflation that are intended to replace the CPI-X measure as the guide of underlying price pressures. The new measures are CPI-Common, CPI-Trim and CPI-Median. How will the three new core measures be used by the BoC? It is still a mystery. Will they look at all three, emphasis one more than the other or take an average? While the new measures introduce some uncertainty, Canada's ample spare capacity will keep underlying price pressures muted well into 2017.