Canada: Inflation likely drop to 2.7% in August - NBF

Next week in Canada, economic data to be released includes CPI, GDP and retail sales. According to National Bank of Canada analysts, the Core CPI in August remained at 1.9% (annual) and retail sales likely rebounded in July 0.3%. 

Key Quotes:

“A lot of attention will be focused on the release of August’s CPI data. Gasoline prices dropped by 1.5% in the month, a soft print compared with historical norms for that time period. That retreat, coupled with an expected reversal in the price of air transportation following a 16.4% surge in July, should translate into a 0.2% decline for headline prices in August (m/m, not seasonally adjusted). This would lead to a three-tick drop of the 12-month rate to 2.7%. The annual rate for CPI-common, for its part, should remain unchanged at 1.9%.”

“We’ll also get information about economic activity in early Q3 thanks to July data. Headline retail sales may have resumed their upward trend in the month following a slight retreat in June. That said, lackluster auto sales and an above-trend increase in gasoline prices should translate into a steeper rate of growth for ex-auto sales. If a small increase in exports of factory goods is any guide, manufacturing shipments may have posted a slight increase in July following two very strong months. We’ll also keep an eye on the release of international securities transactions for July and existing home sales for August.”