Nomura Still Sees Bank of Canada on Hold This Year Despite CPI Surge in March

09:37 AM EDT, 04/21/2026 (MT Newswires) -- Overall, Monday's CPI report suggests energy price pressures stemming from the Iran war could keep headline inflation elevated in the coming months, but the underlying inflation trajectory in Canada remains broadly unchanged, says Nomura in reflecting on Monday's data release.

It continues to expect the BoC to remain on hold through 2026.

On the data, Nomura noted the Canadian headline consumer price index accelerated to 2.4% year over year in March, less than the 2.6% consensus but up from 1.8% in February, largely reflecting a sharp increase in gasoline prices (which rose +21.2% month over month).

Excluding gasoline, CPI rose 2.2% year over year from 2.4% previously. Lingering effects of the GST/HST tax break also weighed on headline inflation, noted the bank.

The Bank of Canada's preferred core measures averaged 2.3% year over year, and an array of alternative core measures remained within the BoC's target range of 1% to 3%.

Shelter inflation remained subdued at 1.7% year over year. Rent inflation edged up, while mortgage interest costs continued to slow. Homeowners' replacement costs fell, reflecting tepid housing demand.

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