TORONTO (Reuters) - Canada's annual inflation rate slowed to 2.9% in January on lower year-over-year prices for gasoline, as well as food prices, Statistics Canada said on Tuesday.
This exceeded analysts' expectations for annual inflation to dip to 3.3% from 3.4% in December.
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COMMENTARY
KARL SCHAMOTTA, CHIEF MARKET STRATEGIST AT CORPAY:
"The Canadian inflation picture is diverging relatively dramatically from what we're seeing in the rest of the world. Inflation pressures are decelerating far more quickly than anticipated... And that sort of provides further evidence of softness in the underlying economy. So this is very likely to pull Bank of Canada rate expectations forward and substantially narrow that gap between expected rate trajectories in Canada and the U.S."
"It will certainly raise the odds on an April rate cut. The Bank is likely to still wait for more data before pulling the trigger. But this does significantly raise the likelihood that they do move in an anticipatory fashion here and try to move rates back into accommodative territory."