Canadian PPI rose 2.0% m/m in September, accelerating from 1.3%

• The prior month-on-month reading was +1.3%.
• The year-on-year PPI came in at 14.5%, compared with 13.5% previously.
• Raw materials posted a 4.8% month-on-month increase, versus 3.3% earlier.
• On a yearly basis, the raw materials index rose 27.0%, up from 22.9%.

Traders see an 80% probability of a Bank of Canada interest-rate increase on October 28. While this week's CPI print came in softer, the data release signals that price pressures are embedded in the pipeline.

The USD/CAD exchange rate dropped 10 pips to 1.4035, underlining how the currency market dynamic has reversed. S&P 500 futures fell 0.9%, which the market interprets as capital shifting away from the US artificial-intelligence trade rather than a conventional risk-off adjustment.

Statistics Canada releases producer price data through two monthly reports: the Industrial Product Price Index (IPPI) and the Raw Materials Price Index (RMPI). Both are issued at 8:30 a.m. ET, usually a few weeks after the reference month.

The IPPI captures prices Canadian manufacturers get as goods leave the factory gate, spanning refined petroleum, lumber, metals, chemicals, food products and motor vehicles. The RMPI registers what manufacturers spend on raw inputs such as crude oil, metal ores, logs, grains and livestock. Many of these inputs are not sourced domestically, making the RMPI a proxy for global commodity costs entering Canadian industry.

The headline numbers cover monthly and annual changes, neither of which is seasonally adjusted. Because energy carries such weight, Statistics Canada offers an IPPI version that excludes energy and petroleum products, providing a clearer picture of general factory-gate pricing.

The currency rate is a major influence. Numerous Canadian exports—lumber, metals and energy among them—are priced in US dollars, so a weaker Canadian dollar inflates their reported value and pushes the IPPI higher. A strengthening loonie pulls it down. Consequently, some index moves are currency-driven rather than reflecting genuine pricing pressure.

Unlike the US PPI, the Canadian index covers only goods and is not part of the preferred inflation gauge, so it seldom drives market moves. Instead, it is followed as an early warning of cost pressures that might later reach retail prices, and as a measurement of how commodity price swings and tariffs impact producer margins.