Content and data provided by various third parties and Fidelity - Terms of Use
Print.Print
Small font size A Larger text size A Largest text size A

Tuesday's Expected CPI Bounce in Canada Shouldn't Scare The Central Bank, Says ING

BY MT Newswires | ECONOMIC | 06:26 AM EDT

06:26 AM EDT, 05/19/2026 (MT Newswires) -- Tuesday's release of Canada's April consumer price index at 8:30 a.m. ET should show a sharp rise in headline inflation, driven by food and gasoline prices, said ING.

The consensus is looking for a 3.1% year-over-year print, while core measures (median and trim) should remain anchored around 2.2%-2.3% year over year, noted the bank.

In ING's view, this implies limited pressure on the Bank of Canada to hike rates for now, especially following the 0.2 percentage point increase in the unemployment rate in April. The BoC has already sounded caution on tightening prospects, keeping a firm focus on the risks associated with the upcoming CUSMA trade deal renegotiations.

Against this backdrop, the 44bps priced into the Canadian dollar (CAD or loonie) OIS curve by December looks too hawkish, reflecting broader global front-end repricing rather than domestic dynamics, in the bank's view.

ING remains cautious on the downside potential for USD/CAD, given potential United States-Canada trade tensions this summer. The bank's 1.34 year-end call for USD/CAD remains primarily a mirror of expected US dollar (USD) weakness rather than CAD outperformance versus peers.

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

More Fixed Income News

All Fixed Income News

In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

© 1998 – 2014 FMR LLC.

All rights reserved.
fir_news_article