Canada’s headline inflation decelerates year-on-year in October

Canada’s headline inflation decelerated in October, coming in line with expectations. Consumer price inflation dropped to 1.4 percent year-on-year. Sequentially, the consumer prices rose 0.2 percent. A slowdown in gasoline prices, after hurricane-related run-ups in September and August, was the main factor weakening inflation.

Gasoline prices rose 6.5 percent year-on-year in October, a fall from the rise of 14.1 percent in the prior month. Stripping gasoline prices, inflation accelerated to 1.3 percent from 1.1 percent. Food and beverages prices dropped 0.2 percent sequentially in October and slowed to 1.3 percent year-on-year.

Core prices came in mixed. The CPI-median dropped to 1.7 percent year-on-year, while CPI-common rose to 1.6 percent. CPI-trim was unchanged at 1.5 percent. Stripping food and energy, inflation rose to 1.4 percent.

There is possibility that inflation will soon turn a corner. Wage growth has accelerated markedly in recent months and job growth has been concentrated in full-time positions, noted TD Economics.

At 16:00 GMT the FxWirePro's Hourly Strength Index of Canadian Dollar was neutral at 7.59284, while the FxWirePro's Hourly Strength Index of US Dollar was neutral at -49.5769. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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