Daily Update (Source: RBC Financial Group
Bank of Canada holds overnight rate at 1.00%; core inflation to remain contained
Apr 17, 2014
- Canadian consumer prices increased by 0.6% on a not seasonally adjusted basis in March 2014, which was double the pace expected by financial markets.
- The year-over-year rate rebounded to 1.5% from 1.1% in February.
- The Bank of Canadaís core measure rose 0.3% on an unadjusted basis, as was expected.
- The year-over-year core rate crept up to 1.3% from 1.2%.
- Yesterday, the Bank of Canada revised its inflation forecast to incorporate the higher than expected headline rate for the first two months of 2014, the effect of the weaker Canadian dollar, and a higher projected trajectory for natural gas and gasoline prices. This revision was validated with todayís data for March indicating that the headline rate averaged 1.4% and that the core inflation rate was 1.3% in the first quarter of 2014. Our forecast that the economy will grow at a 2.5% pace in 2014 and a stronger 2.7% in
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