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Canada's Industrial Product Prices "Well Behaved," Excluding Energy, Says BMO

-- Canadian industrial product prices (IPPI) jumped 8% year over year in March, driven largely by the energy shock from the Iran war, said Bank of Montreal (BMO) after Thursday's release of the IPPI.

While energy and oil products soared almost 30% year over year -- the highest since the COVID-19 pandemic -- the rest of the products were "well behaved," noted the bank.

Yearly growth in producer prices, which excludes energy, slowed to a "reasonable" 5% pace, pointed out BMO.

Combined with a better-than-expected consumer price index for March, it looks like the initial inflation impact from the Iran war was well contained, stated the bank. Some of that has to do with timing -- it can take months for the more expensive inputs to get

to producers -- and will certainly be dictated by how long the Strait of Hormuz remains closed/blocked.

The Bank of Canada will remain patient as it tries to look through the initial effects to determine how broader prices and inflation expectations respond, according to BMO.

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