Canada’s Bank of Canada Consumer Price Index Core (MoM) saw a decline to -0.1% in November, down from 0.6% in the previous month. This change reflects a slowdown in consumer price growth during the period.<\/p>\n
In currency news, GBP\/USD approached 1.3400, with traders preparing for a Bank of England rate cut. The EUR\/USD traded near multi-week highs amid a weaker US Dollar and a cautious outlook from the Federal Reserve.<\/p>\n
Elsewhere, Canadian home sales remained flat in November, showing stability in the housing market. In trading, Solana’s price hovered above $131 as institutional demand drove nearly $1 billion into spot ETFs.<\/p>\n
Gold was trading around $4,300, with market caution influencing its movement. The S&P 500 saw gains amid a Federal Reserve rate cut, impacting primarily the non-tech market sectors.<\/p>\n
FXStreet provides information with disclaimers about the risks associated with investing, emphasising that this content is not investment advice. Readers are encouraged to conduct their own research before making financial decisions. The information is not guaranteed to be error-free or timely.<\/p>\n
The surprise decline in Canada’s core inflation to -0.1% month-over-month is a major signal for us. This sharp drop from the previous 0.6% strongly suggests that the Bank of Canada’s policy has successfully cooled price pressures. Looking ahead, this dramatically increases the odds of a BoC interest rate cut in the first quarter of 2026.<\/p>\n
We are seeing this disinflationary trend backed by other data, with annual CPI having fallen to 2.3% in November, bringing it much closer to the central bank’s 2% target. This slowdown comes as the labor market softens, with the national unemployment rate recently ticking up to 6.1%. This combination of cooling inflation and a weaker economy puts immense pressure on the BoC to act.<\/p>\n
For rate traders, this means we should anticipate the Canadian yield curve to shift lower. We believe positioning for the BoC\u2019s next meeting in late January can be done through derivatives like Bankers’ Acceptance futures (BAX). Any long positions in these instruments would benefit from the expected cut in the overnight rate.<\/p>\n
In the foreign exchange market, this policy divergence with the US Federal Reserve should weigh on the Canadian dollar. The Fed has been more cautious, so a BoC cut would likely send the USD\/CAD exchange rate higher. We see value in buying USD\/CAD call options to capitalize on this expected weakness in the loonie.<\/p>\n
This environment is also supportive for Canadian equities, as lower borrowing costs would help corporate profits. A rate cut could ignite a rally in the S&P\/TSX 60 index that has been lagging for much of 2025. We think traders should consider buying call options on broad Canadian stock market ETFs to position for this potential upside.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" Canada’s core CPI declines; GBP\/USD nears 1.3400; Solana rises; gold steady; S&P 500 gains.<\/p>\n","protected":false},"author":62,"featured_media":17022,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-36871","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/36871","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=36871"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/36871\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/17022"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=36871"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=36871"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=36871"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}