(Reuters) - Canada's annual inflation rate slowed to a three-year low of 2.7% in April, matching expectations, and core measures continued to ease, data showed on Tuesday, likely boosting chances of a June interest rate cut.
Analysts polled by Reuters had forecast inflation to cool to 2.7% from 2.9% in March. Month on month, the consumer price index rose 0.5% in April, also less than a forecast of 0.6% gain.
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COMMENTARY
ANDREW GRANTHAM, SENIOR ECONOMIST, CIBC CAPITAL MARKETS
"Today's data should have provided the all clear on the inflation front that the Bank of Canada needed to start cutting interest rates in June."
"At the time of the April interest rate decision, the Bank of Canada Governor stated that policymakers were encouraged by recent subdued inflation readings, but needed those to persist for longer before cutting interest rates. Since then we have received two more months of data pointing to tame underlying inflation, for a total of four in a row, and because of that we continue to forecast a first rate cut at the next meeting in June."
DOUG PORTER, CHIEF ECONOMIST, BMO CAPITAL MARKETS
"Another reasonably good number from Canada. I would characterize this as not bad, not bad at all. It's fairly encouraging the fact that every major measure of core is now below 3% as is the headline."
"This is in reality the fourth report in a row this year from Canada that's at least as good as expectations if not better, so the encouraging trend continues."
"We've had a June cut in our forecast since late last year and I think this is good enough to stick to that. I don't say that with a lot of conviction of course but I think there is enough here, if the bank feels the need to cut rates, I think this is low enough to provide reasonable cover."
(Reporting by Fergal Smith; Editing by Denny Thomas)
