Canada Government Bond 10Y

Statistics Canada reported on the 14th that the August consumer price index rose 3.0% year-on-year, with the growth rate unchanged from July. On a month-on-month basis, it fell 0.1%. Persistently high crude oil prices affected gasoline prices, while the slowdown in food price growth was also limited. Gasoline prices rose 22.8% year-on-year, slowing from a 25.7% increase the previous month. Food prices rose 2.8%, falling below 3% for the first time in 14 months, as growth in dairy products slowed. Travel and tours rose 26.1%. The CPI median, which shows the median change rate of component items, was 2%, and the CPI trim, which excludes items with extreme price fluctuations, was 1.9%. The Bank of Canada has indicated it will not hesitate to raise interest rates multiple times if inflation remains elevated and affects core indicators, and after the CPI release, the Canadian dollar has been trading with a selling bias against the US dollar.

Bank of Canada Governor Tiff Macklem said that upside risks to inflation are increasing. He noted the possibility of stronger price pressures and said monetary policy needs to be managed carefully. The remarks have strengthened expectations among market participants of further interest rate hikes.