Rosenberg Research Says Canada's January CPI Report "Simply Superb" If You Are Long GoC Bonds and See Chance of a Rate Cut

09:35 AM EST, 02/18/2026 (MT Newswires) -- The Canadian consumer price index data released on Tuesday was "simply superb" -- if you are long the Government of Canada (GoC) bond market and of the view that the door is, in fact, still open for more Bank of Canada rate relief, according to Rosenberg Research.

For whatever reason, it noted, the headline gets released on a non-seasonally-adjusted basis, but even so it came in flat sequentially versus the 0.1% month-over-month consensus estimate, while the year-over-year trend receded to 2.3% in January from +2.4% in December, which also was the consensus estimate.

Rosenberg Research noted the core rate of inflation eased to 2.4% year over year, which undercut the consensus 2.6% forecast and was below the 2.5% trend printed in December. It also ntoed the median inflation rate cooled off a touch to 2.5% year over year from 2.6% -- up a mere +0.1% month over month for a third month running -- and the trimmed-mean measure, another key underlying price metric, slowed to 2.4% year over year from 2.7% -- and "that is a very big move down".

To little surprise, the Canadian dollar (CAD or loonie) sold off "modestly," and the front end of the GoC curve improved "nicely" in response to this report, said the research.

On a seasonally-adjusted basis, the research noted, the CPI came in at less than 0.1% month over month, which is tied for the weakest pulse since last April. Only apparel and recreational services showed any verve in terms of pricing power to kick off the year.

The old way used to look at "core," the CPI excluding food and energy, was a mere 0.1% on a month-over-month basis and the six-month trend is now running just a snick above a 2.0% annual rate, which must be a source of comfort to a central bank with a singular mandate on low and stable inflation -- this pace was running closer to a 3.0% pace last June.

The CPIX, which adjusts for sales taxes and strips out the eight most volatile components, came in south of 0.2% month over month for three months in a row and hasn't come in above 0.3% in any month going back to last April.

"Not a blemish on this report," said the research, before adding: "But the fact that....pricing power is starting to subside does reflect a blemish on the soft state of Canadian domestic demand growth and the fact that the disinflationary output gap is still widening.

"The question emerges as to just how long the Bank of Canada is going to be able -- or willing -- to stay on the sidelines," and Rosenberg predicts, "not for much longer".

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