Canada inflation steady at 6.9%, keeping rate hikes on track

Canada’s annual inflation rate held steady in October, but some key gauges of underlying price pressures trended higher, likely keeping the central bank on track to press ahead with interest rate hikes.

The consumer price index rose 6.9 per cent from a year ago, in line with economist expectations and matching the increase in September, Statistics Canada reported Wednesday. The index gained 0.7 per cent during the month, a touch lighter than the 0.8 per cent month-on-month gain forecast by economists.

Bonds fell, with Canada’s two-year yield rising to 3.877 per cent at 8:43 a.m. Ottawa time, about 3.5 basis points higher than its level prior to the data release. The loonie briefly dropped, then recovered to trade at $1.3241 per U.S. dollar.

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