Canadian CPI (Aug MM) -0.1% vs. Exp. 0% (Prev. 0.5%)

The distinction that has mattered in past episodes is between the headline monthly figure, which is noisy and seasonally driven, and the Bank's preferred core measures, which have tended to dictate whether a soft print actually moves the policy path or is dismissed as volatility. Where core has corroborated the headline weakness, front-end Canadian rates have typically rallied and the curve has steepened against the US leg, with the loonie underperforming on the widening policy differential. Where core has held firm, the initial move has tended to fade within the session. The follow-ons of note are the core detail within this release and the proximity of the next Bank of Canada decision, since the reaction function in easing phases has historically been asymmetric, with soft prints priced more aggressively than firm ones. As a single data point rather than a trend, the signal is directional but contingent on the internals.