04:42 PM EDT, 07/15/2024 (MT Newswires) -- Ahead of Tuesday's CPI release, RBC said today it is below expectations for the June report at -0.1% m/m (vs. +0.1% consensus), and 2.7% y/y (vs. 2.8% consensus) for headline. The decline in the index is expected to be driven by lower gasoline prices in June and slowing food price increases, it added.

RBC noted that after four consecutive prints of slowing headline inflation leading to a "justified" first cut at the June BoC meeting, the May CPI print was hotter for both headline inflation and core measures, which could make the Bank more cautious around their July meeting decision (July 24).

The focus again, RBC said, will be on CPI-Trim and CPI-Median, and the bank expects both to print around +0.2% m/m. It added the 3 month annualized measure should tick higher (likely 2.8-2.9% y/y) as the smaller increases from the March report rolls out of the calculation. This outcome would likely result in a follow-up BoC cut next week.