CANADA DATA: October CPI Preview: Analysts Eye Lower Gasoline Prices (2/2)

Canadian analysts' expectations for October inflation: 

• CIBC: "Inflation should have eased slightly in October, mainly due to a drop in gasoline prices following an increase in the prior month that was atypical of usual seasonal patterns....Measures of core inflation may not decelerate as much, with rent inflation still stubbornly higher relative to market asking prices.... Inflationary pressures should have eased again relative to the prior month but, with various year-over-year core measures still averaging closer to 3% than 2%, the inflation data are likely to reaffirm that the Bank of Canada is on hold for the foreseeable future."
• Desjardins: "The removal of retaliatory tariffs last month continues to filter through to consumer prices, which should help temper headline inflation in the coming months. With goods inflation excluding food and energy already trending lower, the elimination of countertariffs is expected to further support this normalization. Services inflation, which remained sticky due to strong readings in late 2024, is likely to continue its downward trajectory, with additional progress anticipated through Q4. A similar trend is evident in the Bank of Canada’s core measures, which likely moderated slightly in October but remain near 3%."
• National: "Despite a drop in energy prices, headline prices may still have increased 0.2% in the month (not seasonally adjusted). If we’re right, the annual inflation rate could decline by three-tenths of a percentage point to 2.1% as a result of a highly negative base effect. Looking at the Bank of Canada's core measures, we expect the CPI-med to move from 3.2% to 3.1% on an annual basis, while the CPI-trim should ease from 3.1% to 3.0%.
• RBC: "moderation is expected to be primarily driven by lower gasoline prices, which fell 5% from September.  We expect food price growth to hold close to September’s 3.8% annual rate in October. The October data will include the annual update on property tax prices in the CPI data. Significant property tax increases again took effect in some major population centers, but nationally we expect a smaller increase (4%) than the 6% increase in October a year ago. Headline CPI growth continues to be distorted on the downside by the removal of the carbon tax from energy products in most provinces in April. Broader measures of ‘core’ inflation are expected to remain above the Bank of Canada’s 2% target rate in October."
• TD: "A larger drag from energy and further disinflation in shelter should drive the headline print, while core measures edge lower to 2.95% y/y in a sign of thawing underlying price pressures. However, we don't expect material implications for the near-term rate outlook given hawkish BoC guidance last month."