Canada's Inflation Eases to 1.6%, Ups Chances of 50 Bps Rate Cut Next Week

• Canada's annual inflation rate slowed more than expected to 1.6% in September, data showed on Tuesday, prompting markets to increase bets of a 50-basis point rate cut next week. The easing of inflation, which was mainly led by a huge drop in the price of gasoline, was the smallest annual increase in consumer prices since February 2021, Statistics Canada said.
• Consumer prices in Canada have consistently eased since the beginning of the year, touching the mid-point of Bank of Canada's 1%-3% target range last month as high interest rates hobbled consumer demand and business investments.
• Analysts polled by Reuters had forecast the inflation rate would cool to 1.8% from 2.0% in August. Month-over-month, the consumer price index decreased 0.4%, compared with a forecast of a 0.2% decline. Excluding gasoline prices, the inflation rate remained at 2.2% in September, Statscan said.
• The central bank's preferred measures of core inflation, CPI-median and CPI-trim, were also unchanged. CPI-median - or the value at the middle of the set of price changes in a month - stayed at 2.3%, and CPI-trim - which excludes the most extreme price changes - remained at 2.4%.

(Source: Reuters)