CA CPI [m/m]

Once the data approach the target level of the Bank of Canada, the market responds better to the publication of this report, because overcoming the established threshold raises additional concerns about the likely change in the monetary policy of the regulator. The further we are from the target inflation level, the higher the chance that the Bank of Canada will intervene and adapt its policy either by boosting the reflation or by lowering it. As a rule, the target inflation level is set at 2% and can vary depending on the objectives of the central bank.

Please note that after the Statistical Office of Canada had changed the estimation methods for the indicator, we switched our trading attention from the Core CPI to a regular CPI, because three other CPIs replaced the Core indicator: Trimmed CPI, Median CPI and Common CPI.

The market was a bit confused due to this and shifted its attention to the general consumer price index.

Monitor the pair movement before the moment of publication: if you haven’t received the data at the time of release but can see how the trading pair is already reacting, then abandon trading.

Monitor if there are any neighboring releases at the same time, since the consumer price index, for example, may (sometimes) be released simultaneously with Canada's retail sales data. This simultaneous publication should cause you extra caution.