CIBC's Economic Forecast, Markets Reaction to Canada's June CPI

11:48 AM EDT, 07/15/2025 (MT Newswires) -- The Canadian June consumer price index report showed price pressures likely remained a bit too firm for the Bank of Canada's liking, said CIBC after the release of the CPI data.

The headline index rose by 0.1% month-over-month in non-seasonally adjusted terms and by 0.2% month-over-month seasonally adjusted (SA). in line with consensus, and the annual rate moved up two ticks to 1.9% yer over year, partly due to base-year effects, noted the bank.

The BoC's preferred core measures, CPI trim and median came in at 0.2% and 0.3% month-over-month SA respectively, keeping the annual rate for trim unchanged at 3.0% and median one notch higher at 3.1%. CPIX and CPI excludingfood and energy also rose by 0.3% month over month in June.

Shelter costs rose as rents surprisingly increased -- although that series has become very volatile -- and core goods inflation remained elevated.

Canada's central bank will want to see cost pressures contained and measures of underlying inflation cool a bit more before providing relief to the economy, stated CIBC. The bank expects the BoC to remain on pause at its July 30 policy decision.

Yields modestly picked up after the CPI release and the Canadian dollar (CAD or loonie) modestly appreciated before slipping back, according to CIBC.

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