Canadian June CPI highlights:

  • Prior was +0.9% y/y
  • Core CPI 2.3% y/y vs +2.2% y/y expected
  • CPI +0.2% m/m, as expected
  • Core CPI m/m 0.0% vs -0.1% expected

A touch strong on the core but it's basically a rounding error. There's nothing to change the outlook on the BOC here but it might damped expectations for another move in September.

USD/CAD initially ticked lower on the headlines but it reversed on broad USD demand on solid housing starts.

It's an instructive lesson in how sticky inflation is that Canadian inflation is only slightly higher than the US, despite a nearly 30% divergence in their respective currencies in the past year. Eventually, the weak loonie will boost Canadian prices but it will be slow and never match the 30% FX move.