Canada’s Inflation Rate Increased by 0.7 Percent in October, Due to Rising Food Prices

Statistics Canada said the consumer price index in October rose 0.7% from a year ago due to the annual inflation rate increased because of higher food prices. The increase compared with the annual increase of 0.5% in September.

Economists were expecting a 0.4% annual gain, according to financial data firm Refinitiv.

The jump in October was the strongest increase since June in the past eight months, when monthly gains were less than 1%.

Statistics Canada said the monthly increase is almost entirely due to food prices, especially fresh or frozen salads and chicken.

The agency said rising housing costs contributed the most to the annual increase due to lower mortgage rates and increased demand for single-family homes.

The Canadian dollar rose against the greenback on Wednesday as positive news about the COVID-19 vaccine boosted oil prices and after data showed higher base inflation supported the decision to cut back on Bank of Canada’s emergency stimulus measures.

Last month, the central bank reduced its bond-buying program from C $ 5 billion to $ 4 billion per week. Some other urgent support measures for financial markets in times of crisis have been reduced.

Oil prices, one of Canada’s main exports, rose on the hope that OPEC and its allies would delay the planned oil increase and after Pfizer said its COVID-19 vaccine was effective. than previously reported.

The price of US crude rose 1.2% to $ 41.94 a barrel, while the Canadian dollar traded 0.1% higher at 1.3090 against the greenback or 76.39 US cents. Currencies are traded in the range from 1.3056 to 1.3117.

Canadian home prices rose 1.3% in October compared to September. The National Bank Teranet’s house price index showed that it was the strongest increase in October in 22 years.

Canada’s September Retail Sales Report will be released on Friday.

Canadian government bond yields touch many values ​​on the flat curve, with 10-year notes down 4.2 basis points at 0.696%.

There are still instances where gold prices can return above $ 2,000, according to Franklin Templeton

The gold market continued to stay below 1,900 USD / oz when investor sentiment declined due to more news about potential vaccine for the COVID-19 pandemic; However, one fund manager does not expect this to keep gold prices down in the long run.

In a recent phone interview with Kitco News, Steve Land, vice president and portfolio manager of Franklin Templeton’s Franklin Gold and Precious Metals Fund, said though vaccines are good for economic growth. And governments and central banks still have to deal with pandemic-devastating economies.

“Now we can see a way forward, but there are still a lot of unanswered questions,” he said. As we expected, there is certainly a possibility of inflation. There is a possibility of currency devaluation. That should be positive for gold. “

While it might take a little longer than initially expected, Land says he sees some instances where gold prices could push back to all-time highs above $ 2,000 an ounce.

Even as the US and global economies improve, Land says he expects investors to hold their shares as an insurance policy against sudden fluctuations and uncertainty. . He added that over the past decade, gold has continued to strengthen its role for investors as an essential portfolio diversification tool.

At the end of today’s trading day, CAD = 0.7655 according to the Bank of Canada.

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