Canada: Headline CPI inflation firmed to 2.2% YoY in November - TD Securities

Commenting on Wednesday's inflation data from Canada, "headline CPI inflation firmed to 2.2% YoY in November owing to a sizable base-effect, with prices down 0.1% MoM," noted TD Securities analysts.

Key quotes

"Gasoline prices (-2% MoM) weighed on prices in November but now sit in positive territory on a year-ago basis, eliminating the 0.2pp drag from October."

"Core inflation also firmed to 2.17% y/y on average, reflecting a pickup in 2 of the 3 measures. The Bank of Canada will look past the headline strength given the influence of base-effects, but it will be much harder to fade the pickup in core CPI."

"Rates: Core Inflation at 2.17%, the highest level since 2009, is the hawkish takeaway, nonetheless we see limited downside in 2s off of this release."