Canada: Expect a 0.2% m/m drop in headline CPI in July – RBC CM

Research Team at RBC Capital Markets, is expecting a 0.2% m/m drop in Canada’s headline CPI in July, driven by an expected 5.5% m/m fall in gasoline prices.

Key Quotes

“Food prices were weak in Q2 (in both non-core fruit and vegetables and core food items), down 1.2% in aggregate (not annualized) from March to June, and we anticipate some further weakness in July.

Seasonal downward price pressure in clothing and motor vehicle prices should also contribute to an expected 0.1% m/m decline in core prices. On a y/y basis, the gasoline price decline should see the rate decline three-tenths to 1.2%, while the core rate should nudge down to 2.0%.”