Key facts
- Canada September PPI rose 2.0% m/m versus 1.3% prior
- PPI y/y was 14.5% versus 13.5% prior
- Raw materials price index rose 4.8% m/m versus 3.3% prior, and 27.0% y/y versus 22.9% prior
- Markets are pricing an 80% chance of a Bank of Canada rate hike on October 28
- USD/CAD trades at 1.4030, −0.11% on the day
Canada's producer prices surged well above forecasts in September.
Canada's PPI rose 2.0% m/m versus 1.3% prior, with y/y inflation at 14.5% versus 13.5%. Raw materials costs also accelerated sharply. The beat could reinforce Bank of Canada rate hike expectations for October 28, though a softer CPI this week may complicate the picture. USD/CAD traders could watch for volatility as markets weigh the data ahead of the decision.
Canada's PPI surged 2.0% m/m in September, well above expectations
The prior reading was 1.3% m/m. Annual producer price inflation also climbed to 14.5% from 13.5%.
Raw materials costs rose even faster, up 4.8% m/m and 27.0% y/y.
Data could reinforce BoC rate hike bets ahead of the October decision
Markets are pricing an 80% chance of a hike on October 28. Producer price inflation can be a leading indicator for consumer prices.
A softer CPI reading earlier this week may complicate that narrative somewhat.
Traders may watch USD/CAD levels and upcoming data into the decision
USD/CAD trades near 1.4030, with support at 1.4032 and resistance at 1.4082.
Canadian Retail Sales data on Friday could add further signals ahead of the October 28 Bank of Canada decision.
The markets in focus
- USD/CAD: 1.4030 −0.11%
What to watch
- Bank of Canada rate decision, Oct 28: an 80% priced-in chance of a hike means the outcome could drive significant USD/CAD volatility either way.
- Whether USD/CAD holds above 1.4032 support: a break below could signal further CAD strength tied to hawkish BoC expectations.
- CAD Retail Sales data, Fri 23 Oct 12:30 UTC: consumer spending data could add to or offset the inflation narrative ahead of the rate decision.
Educational information only. Not investment advice. Trading involves risk of loss.