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TD Securities forecasts Canada’s April CPI to rise to 3.1% year-on-year, driven by higher energy prices and base effects from the removal of carbon taxes. This would mark a significant acceleration from the previous 2.9% reading in March. The bank attributes the surge to energy price volatility and the statistical impact of carbon tax removal in the prior year, which creates a low base for comparison.
The CPI data is critical for markets as it influences the Bank of Canada’s (BoC) monetary policy decisions. A stronger-than-expected reading could delay rate cuts, supporting the Canadian dollar (CAD). Traders are closely monitoring the April CPI release on May 15, which may trigger volatility in USD/CAD and other commodity-linked currencies.
For MENA investors, the outcome could affect trade flows and commodity exposures, particularly oil-linked assets. The key focus will be on whether the BoC signals a policy pivot in response to inflationary pressures. Investors should watch the May 15 CPI data and subsequent BoC statements for directional cues.
