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Canada's Tuesday CPI Shouldn't Change The Picture of Bank of Canada's Expected Rate Cut, Says ING

BY MT Newswires | ECONOMIC | 10/21/25 07:19 AM EDT

07:19 AM EDT, 10/21/2025 (MT Newswires) -- Canada releases the consumer price index for September at 8:30 a.m. ET Tuesday, said ING.

Headline CPI should have rebounded above 2.0% year over year, but that won't matter too much for the Bank of Canada as long as core measures -- trim and median -- remain anchored around 3.0%, wrote the bank in a note to clients.

Anyway, the Bank of Canada has been firmly focused on growth and job risks associated with tariffs, and much less on inflation, stated ING.

Despite stronger-than-expected jobs data earlier in October, markets are pricing in 19bps of easing ahead of next week's BoC meeting, added the bank.

The BoC's Business Outlook Survey (BOS) for Q3, published Monday, offered more evidence of prolonged drag from United States tariffs, plenty of uncertainty leading to slow investments and muted hiring intentions, pointed out ING. The BoC echoes a lot of business concerns included in its survey when it cut rates in September.

The BoC would need to find a compelling story for signs of resilience or inflation concerns to stay on hold on Oct. 29 October, according to the bank.

MT Newswires does not provide investment advice. Unauthorized reproduction is strictly prohibited.

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