Daily digest market movers: Canadian CPI approaches as Fed watch continues to grind away

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  • Markets are broadly looking ahead to this week’s kick-off of the Jackson Hole Economic Symposium, where rate-cut-hungry investors will be hanging on every word from Federal Reserve (Fed) policymakers.
  • Recent bets of a double cut in September have eased significantly after reaching a peak of 70% two weeks ago. According to the CME’s FedWatch Tool, rate markets are pricing in a scant one-in-five chance of a 50 bps cut on September 18.
  • Overall, markets still have a 25 bps cut in September fully priced in, with three or four quarter-point cuts expected by the end of the year.
  • Canadian Consumer Price Index (CPI) inflation forecast to tick down to 2.5% from 2.7% for the month of July
  • Canadian Core CPI is expected to accelerate to 0.3% MoM from the previous month’s -0.1% contraction.


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