09:41 AM EDT, 07/16/2024 (MT Newswires) -- According to TD Economics, today's CPI report was "a bit of a mixed bag".

TD noted that while headline inflation "got back on track" in June, the three-month annualized pace of core inflation has now been rising for three straight months. It said this infers that the annual pace of inflation should remain in the upper end of the BoC's 1% to 3% range over the coming months. This has been "propelled", not just by shelter prices, but also by price gains in 'nice-to-haves' like the cost of dining out, health spending, and household operations, TD added.

TD noted the BoC is set to make a rate announcement next week and today's report has increased odds of back-to-back rate cuts. TD said recent data have supported a cut, with the job market loosening and wage gains decelerating from elevated levels.

"From our view, the story hasn't changed," TD added. "The BoC is in a cutting cycle. Whether or not it follows through with a slightly quicker pace of cuts next week, Canadians should expect rates to be steadily reduced over the rest of this year and next."