Weekly Market Update – September 17 -September 21, 2018

Canada’s Inflation eased for the first time in four months in August, in line with market expectations. Annualized Inflation decelerated to 2.8% but remained close to the near seven-year high of 3.0% attained in July. The downward movement was attributable to a slowdown in the rate of increase in gasoline prices. The Bank of Canada (BoC) has increased interest rates four times since July 2017 and has reiterated that it will need to continue gradually raising rates in an attempt to keep the inflation rate in line. As a result August’s reading which came out above the Central Bank’s 2.0% target for the seventh consecutive month has boosted the likelihood that the Bank of Canada will raise rates in October.

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