-- The much-feared Canadian consumer price index surge in March failed to materialize, as the 0.9% month-over-month gasoline-led headline failed to live up to the consensus billing of 1.1%, said Rosenberg Research after Monday's CPI.
This is on the non-seasonally adjusted data -- the seasonally-adjusted print was 0.5% sequentially -- but excluding energy (gasoline prices soared a record 21% month over month), the CPI was flat and has shown no pulse at all over the past three months, noted Rosenberg Research.
The year-over-year CPI trend did pick up to 2.4% in March from +1.8% in February, but that too fell short of the 2.6% market expectation.
What was key was the traditional core excluding food and energy index, which slowed to 1.9% year over year from 2.0%, a tick under the Bank of Canada's target -- and, once again, undercutting the consensus forecast of 2.2%, stated Rosenberg.
One key feature of the Canadian inflation data of late has been the reversal of the once-hot housing components, which have flattened on a seasonally-smoothed basis in each of the past five months and in seven of the past eight, taking the year-over-year trend down to a 12-year low of 0.7% from 3.8% this same time in 2025.
The light is green for the BoC to resume its easing cycle once the United States-Iran war finally does end, and a red light has now been established for any policy tightening, which the bond market had recently and Rosenberg believes mistakenly, started to price in weeks ago.
The key is the core, and it rang in completely flat on a month-over-month basis, and that followed mere 0.1% increases in both January and February, added Rosenberg. This has happened just three other times over the past five years and underscores the lack of pricing power in the consumer-facing parts of the Canadian economy.
After all, the six-month trend is all the way down to a 1.6% annual rate, which is something Canada hasn't seen since October 2020, when the BoC was pinning the policy rate near the zero-bound. Not just that, but the three-month pace is now running at a 0.8% annualized rate, and that is the softest trajectory since September 2020, according to Rosenberg.