Canada’s November inflation report delivered a gradual headline print whereas providing the Financial institution of Canada (BOC) its first clear sign in months that underlying worth pressures are lastly cooling.
Statistics Canada reported headline CPI unchanged at 2.2% y/y in November, matching October’s charge however coming in barely beneath the two.3% consensus forecast. Month-to-month CPI rose 0.1%, assembly expectations and down from October’s 0.2% improve.
The important thing growth got here from the BOC’s most well-liked core measures, which had stubbornly hovered round 3% since April, when U.S. tariffs started affecting Canadian costs.
Each CPI-median and CPI-trim fell to 2.8% from 3.0% in October, marking the primary time since March that these measures dropped beneath the higher finish of the central financial institution’s 1-3% management vary.
Key Takeaways
- Headline inflation held at 2.2% y/y in November, barely beneath the two.3% consensus however unchanged from October
- Core inflation measures lastly broke beneath 3%, with each CPI-median and CPI-trim falling to 2.8% from 3.0% the earlier month
- Meals inflation accelerated to 4.2% y/y, the quickest tempo since December 2023, pushed by grocery costs rising 4.7% and restaurant prices up 3.3%
- Gasoline costs declined 7.8% y/y, a smaller drop than October’s 9.4% lower, although month-to-month costs rose 1.8%
- Lease inflation cooled to 4.7% from 5.2%, whereas companies inflation slowed to 2.8% from 3.2% as journey prices declined sharply
Hyperlink to official Statistics Canada Shopper Worth Index (November 2025)
The slowdown in core inflation helped calm fears that cussed inflation and weak development had been occurring on the identical time, at the same time as meals costs stayed excessive.
With CPI median and CPI trim lastly slipping beneath 3%, economists see underlying inflation shifting nearer to the two% goal. That helps the concept the BOC can keep on pause for longer, slightly than dashing into extra cuts or worrying about charge hikes.
Market Reactions
Canadian Greenback vs. Main Currencies: 5-min
Overlay of CAD vs. Main Currencies Chart by TradingView
Canada’s two-year authorities bond yields declined 2.3 foundation factors to 2.486%, reflecting some discount in charge hike expectations as the info confirmed that underlying inflation pressures had been easing slightly than constructing.
However whereas the easing in core inflation was a constructive signal, the central financial institution had already mentioned at its December 10 assembly that rates of interest had been “about the proper degree” after a hefty 275 foundation factors of cuts. Governor Tiff Macklem additionally made it clear the financial institution is snug staying on maintain for now whereas it watches how the financial system reacts to ongoing commerce tensions with the U.S.
That is probably why the Canadian greenback didn’t maintain its preliminary post-event strikes in the course of the U.S. session. The Loonie, which firmed shortly earlier than Canada’s CPI launch, briefly dipped on the cooler core CPI prints however quickly noticed combined worth motion in opposition to its main counterparts.
The comdoll discovered an intraday flooring a number of hours into the U.S. session, and completed the session close to its pre-CPI ranges. CAD completed the day combined, buying and selling increased in opposition to protected havens USD and CHF and fellow comdolls AUD and NZD, however decrease in opposition to EUR, JPY, and GBP.
