Inflation dips below 3 first time since June 2023
Money markets bets for rate cut in April up to 58
Monthovermonth consumer price index was unchanged
Rental inflation edges up to 7.9 from 7.7 in Dec

OTTAWA, Feb 20 Reuters Canada39;s annual inflation rate slowed significantly more than expected to 2.9 in January and core price measures also eased, data showed on Tuesday, bringing forward bets for an early interest rate cut.

It was the first time in seven months that headline inflation has dipped below 3. That prompted money markets to hike bets for a rate cut in April to as much as a 58 chance from a 33 chance before the figures were published.

The January inflation figure will certainly raise the odds on an April rate cut, said Karl Schamotta, chief market strategist at Corpay.

The Bank of Canada39;s next policy announcement is March 6, and expectations are that rates will stay on hold. Analysts polled by Reuters had forecast inflation to tick down to 3.3 from 3.4 in December.

Monthovermonth, the consumer price index was unchanged, compared with a forecast of a 0.4 rise, Statistics Canada said.

The Bank of Canada targets inflation at 2. Two of the Bank of Canada39;s BoC three core measures of underlying inflation also edged down. CPImedian slowed to 3.3, lowest since November 2021, while CPItrim decreased to 3.4, lowest since August 2021.

The threemonth annualized rate of the combined figures decelerated to 3.2 in January from 3.6 in the prior month, Tiago…