• The Canadian Dollar gave up further ground to the US Dollar despite a broad recovery.
• Canadian CPI inflation printed mostly as expected, market bets of a BoC rate cut eased.
• Crude Oil roils again as geopolitical concerns weigh on fossil fuel market flows.

The Canadian Dollar (CAD) climbed against most of its currency trading peers on Tuesday, but fell back against the US Dollar (USD), which took top spot as the best-performing major currency.

Canada’s Consumer Price Index (CPI) inflation in December mostly came in at expectation, but a lack of price growth easing has trimmed market bets of a March rate cut from the Bank of Canada (BoC).

Daily digest market movers: Canadian inflation hits forecasts, but gives little else for rate cut hopes

• Canadian MoM CPI inflation in December printed as expected as -0.3% versus November’s 0.1%.
• Annualized Canadian CPI rose, printed at market forecasts of 3.4% for the year through December compared to the previous period’s 3.1%.
• Canadian money markets now see a 34% chance of a BoC rate cut in March, down from 46% pre-CPI inflation print.
• Canadian annualized Housing Starts rose to 249.3K for the year through December, over the previous 210.9K (revised from 212.6K), beating the forecast of 243K.
• Federal Reserve (Fed) officials continue to talk down market bets of rate cuts, Fed Governor Christopher Waller notes that inflation needs to be on a gradual pace to 2%.
• Fed's Waller: Near-term data allows Fed to discuss policy cuts in 2024
• Crude Oil markets continue to churn on geopolitical factors surrounding Houthi attacks targeting civilian cargo ships through the Red Sea.