Canada inflation eases
Canada’s annual inflation rate eased to 1.8% in February, though economists warn energy shocks from the Middle East aren’t fully reflected yet Reuters Canada inflation. Markets are watching whether this muted print holds through upcoming commodity shocks — which would influence global policy divergence and currency flows.
The apparent easing reflected a base‑year effect after the federal GST/HST tax holiday ended on Feb. 15, 2025, which pushed prices up a year ago and mechanically lowered the 12‑month comparison this February. (www150.statcan.gc.ca) Key CPI components showed divergent moves: gasoline was down 14.2% year‑over‑year and natural gas down 17.1%, while homeowners' replacement cost fell 2.1% and travel tours were down 3.1% in the same release. (www150.statcan.gc.ca) Statistics Canada also reported that the CPI excluding the effect of indirect taxes rose 1.9% year‑over‑year and the index recorded a 0.5% month‑on‑month increase in February, signalling underlying monthly momentum. (www150.statcan.gc.ca) Markets and economists had expected about a 1.9% year‑over‑year print, and Bloomberg’s survey showed the outcome came in below that consensus, prompting traders to revise near‑term rate‑cut and policy‑divergence probabilities. (bloomberg.com) The February data comes before a major regional escalation after U.S.–Israeli strikes on Iran on Feb. 28, 2026, and subsequent carrier suspensions and reroutings that disrupted tanker and container flows through the Strait of Hormuz. (politico.com) About 20–30% of global oil and gas supplies move via the Strait of Hormuz, and analysts warn that sustained supply disruption would push crude and pump prices higher — a development that has already contributed to equity and FX volatility, with Canada’s markets reacting to the Middle East shock. (aljazeera.com)
