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Investors Reduce Likelihood of Imminent BoC Rate Cut After Weaker-Than-Expected Inflation, Says Deutsche Bank

BY MT Newswires | ECONOMIC | 12:36 PM EDT

12:36 PM EDT, 05/20/2026 (MT Newswires) -- April's Canadian consumer price index print came in on the dovish side on Tuesday, which led investors to dial back the chance of an imminent rate hike by the Bank of Canada (BoC), said Deutsche Bank.

That showed headline CPI "only" rising to 2.8% year over year in April versus 3.1% expected, noted the bank.

In addition, both of the core measures followed by the BoC actually fell, with median core down to 2.1% year over year versus 2.3% expected, and trim core down to 2.0% year over year versus 2.2% expected.

As a consequence, the probability of a rate hike by July fell to just 24%, and in turn that put downward pressure on Canada's front-end yields, added Deutsche Bank.

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

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