CANADA: April CPI Preview: Analysts Eye Potential Core Metrics Uptick (2/3)

MNI median consensus is for Y/Y headline CPI of 1.6% (though there are some forecasts 0.1pp on either side). The average of Trim and Median CPI measures is seen at 2.95% Y/Y, up from 2.85% in March, albeit only from a limited set of analysts. Excerpts from a few sell-side analysts' previews are below in alphabetical order of institution: 

• BofA: "We look for CPI to decrease in April by -0.2% mom nsa after increasing 0.3% in March. Year over year, we believe inflation will fall to 1.6% in April from 2.3% in March. A steep decline in gasoline prices is likely to be the main downward driver."
• CIBC: "CPI-Trim and Median may both tick up slightly on a year-over-year basis, largely due to base effects... While headline inflation is expected to be below the 2% target purely because of the removal of the consumer carbon tax, some recent better news on the tariff front should also make the Bank of Canada less concerned about inflationary pressures moving forward. That provides room for policymakers to respond to the weakening in the economy (reflected in stalling growth and a rise in unemployment) and cut interest rates by 25bp at the June meeting. "
• RBC: "We expect (after-tax) price growth in the Canadian consumer price index to drop to 1.6% in April from 2.3% in March, largely due to the removal of the carbon tax. Gasoline prices plummeted by 10% nationally in April from March, and we expect consumer natural gas prices plunged 27%. The underlying inflation trend (controlling for the tax change) will be closely monitored after March data showed a moderate downside surprise, breaking a five-month streak of mostly upside surprises. The April inflation data is unlikely to show significant pressure from import tariffs yet, and we expect import substitution to alternative sources and consumer substitution to non-tariffed products will ultimately limit the impact of Canadian retaliatory tariff measures on consumer prices (see issue in focus here). Still, we expect food price growth to remain elevated at about 3.2% year-over-year in April like March. Core inflation (excluding food and energy) is projected to rise to 2.6% from 2.4%. Annual growth in the Bank of Canada’s preferred median and trim measures, which exclude the impact of tax changes, should hold steady, just under 3%."