(November 19 – 12:05 ET) –
After sounding the inflation alarm
on Wednesday and raising interest
rates, the Bank of Canada
received some good news on the
inflation front today. The
Consumer Price Index came in
lower than expected for October.
“Unquestionably, these results
are much better than expected and
take the heat off the central
bank in the near term,” says
Sherry Cooper, chief economist at
Nesbitt Burns. She says the
CPI report also bodes well for
Canada bonds.
Economists at CIBC World
Markets say that, “Today’s
benign inflation reading reaffirms
our view that the Bank has not
launched into a significant
tightening cycle with Wednesday’s
hike in rates.” They suspect that
the Bank will remain vigilant but
that it isn’t about to match the
75 basis-points in hikes seen in
the U.S. this year.
Despite the good news so far it,
Nesbitt Burns is not prepared to
declare the inflation scare over.
It is expecting energy prices
increases to start hitting gas
prices and filtering throughout
the CPI in the coming months.
CIBC agrees, and expects hotter
results in the next couple of
releases.
-IE Staff
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