Overview

• Statistics Canada reported that annual consumer inflation in May remained unchanged at 1.7%, matching April’s year-over-year rate.
• Shelter costs rose 3% in May, down from 3.4% in April, while food price growth slowed to 3.3% and gasoline costs fell further following the removal of the carbon tax.
• The Bank of Canada’s preferred core inflation gauges—CPI-trim and CPI-median—both eased to 3%, sitting at the upper edge of its one-to-three-percent target range.
• Money markets assign about a 62% probability that the BoC will keep its policy rate at 2.75% on July 30, with policymakers highlighting June data as key to their decision.
• Economists caution that ongoing trade frictions with the United States could maintain economic weakness and influence the central bank’s future rate-cut prospects.