Overview

• Statistics Canada reported headline CPI at 1.9% year over year in August versus 2.0% expected, with prices down 0.1% on the month.
• Gasoline prices rose 1.4% month over month while still down 12.7% from a year earlier versus a 16.1% decline in July, a shift tied in part to earlier carbon price changes.
• Underlying pressures persisted as CPI‑median held near 3.1%, CPI‑trim eased to 3.0%, and CPI excluding gasoline slowed to 2.4% year over year.
• Essentials stayed firm with food up about 3.4–3.5% year over year, meat up 7.2%, and shelter costs up 2.6% as mortgage and rent increases moderated from July.
• Overnight index swaps now imply roughly 93–95% odds of a 25‑basis‑point cut on Wednesday with the policy rate at 2.75%, as most banks see room to ease though some flag sticky core and potential energy or food volatility.