Credit market-based probabilities of a Bank of Canada rate cut on Wednesday rose following the release of Canadian inflation numbers this morning - which overall were modestly softer than expected.

Based on trading in overnight index swaps markets, traders now see about a 93% chance of a quarter point cut on Wednesday, up from about 87% prior to the inflation report, according to LSEG data.

An additional quarter-point cut is priced into markets by March of next year.

Canada’s annual inflation rate rose 1.9% in August as petrol prices on a yearly basis fell at a slower pace than the previous month and food prices were up slightly, Statistics Canada said. On a monthly basis, the consumer price index was down 0.1% in August.

Analysts polled by Reuters had forecast the annual inflation r

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