The weak CPI has increased the bet on the Bank of Canada's 50 basis point interest rate cut.

According to Carl Shamota, Chief Strategist at Corpay, forex company, traders now believe that there is an 80% chance that the Canadian Central Bank will cut interest rates by 50 basis points next week, as the slowdown in inflation is greater than expected. Pricing of overnight index swaps indicates a 78% probability of a 50 basis point rate cut by the Canadian Central Bank, higher than the 54% before the CPI data was released. However, the core CPI indicator still has some volatility. There is still disbelief that the Canadian economy requires urgent measures on a significant scale. However, the CPI data for September has dropped the threshold for a substantial rate cut.