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Canada’s Inflation Climbs to 2.4% as Gas Prices Surge to Record High

  Canada’s inflation rate accelerated to 2.4% in March , up from 1.8% in February, as the Iran war triggered the largest monthly gasoline price increase on record . Statistics Canada reported that gas prices surged 21.2% month‑over‑month , a supply‑shock response to Iran’s closure of the Strait of Hormuz and broader Middle East instability.  Energy costs were the dominant driver of March inflation, with overall energy prices rising 3.9% year‑over‑year after a sharp decline the month before. Excluding gasoline, inflation would have eased to 2.2% , highlighting how concentrated the price shock was.  Food inflation offered mixed relief: grocery prices rose 4.4% , while fresh vegetables jumped 7.8% due to difficult growing conditions. Restaurant inflation cooled sharply as last year’s tax‑holiday distortions fell out of the annual comparison.  Economists note that while headline inflation spiked, core measures remained relatively tame , giving the Bank of Canada ro...
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Toronto Stocks Decline Amid Surging U.S. Inflation Data

 

 Canada’s main stock index experienced a setback today, snapping a three-day winning streak. The decline came as bond yields surged following hotter-than-expected U.S. inflation data, which dampened hopes of an imminent rate cut by the U.S. Federal Reserve.

Key Points:

  1. Inflation Concerns: U.S. producer prices rose more than anticipated in February, driven by surging costs of goods like gasoline and food. This unexpected spike in inflation prompted bond yields to climb, impacting investor sentiment.

  2. Rate Cut Uncertainty: The market had been speculating about a potential rate cut by the Federal Reserve in the coming months. However, with the recent inflation data, those hopes have receded. Analysts now believe that the first rate cut may be postponed until at least June.

  3. Sectoral Impact: Communication services and technology stocks faced headwinds, contributing to the overall decline. Communication services fell 1.3%, hitting a fresh four-month low, while technology shares reversed course to fall 0.6%.

  4. Lithium Americas’ Boost: Shares of Lithium Americas surged 12.9% after the U.S. Department of Energy granted the miner a conditional commitment loan of $2.26 billion. The loan will finance the construction of its Thacker Pass project in Nevada.

  5. Canadian Factory Sales: In January, Canadian factory sales grew by 0.2% from December, driven by higher sales of motor vehicles and chemical products.

Despite the setback, market participants remain watchful, adjusting their expectations based on economic indicators. The Toronto Stock Exchange’s S&P/TSX composite index closed down 142.28 points (0.65%) at 21,827.83.


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