In August, Canada’s IPPI rose 0.5% month over month and 4.0% year over year (highest since April), driven mainly by higher prices for chemicals, motor vehicles, meat, and non-ferrous metals. Beef and chicken saw strong gains amid tight supply and seasonal demand, while gold and silver rose on Fed rate-cut expectations. Energy and petroleum products fell, led by crude oil and diesel, moderating the overall increase. Precious metals dominated year-over-year gains.
The hotter-than-expected producer inflation reading capped today’s gains in USDCAD, though its precious-metal-driven nature should limit the impact on overall expectations for monetary easing in Canada. Food price increases, while highly visible to households, largely reflect one-off factors such as bird flu outbreaks and are unlikely to shift the policy outlook.
