The Weekly Bottom Line: Well Behaved Core Inflation Strengthens BoC Hold Case

TD Bank’s weekly note says softer-than-expected Canadian CPI details — headline 2.4% in March but shorter-term core measures averaged below 2% — strengthen the case for the Bank of Canada to stay on hold next week. Middle East tensions have driven oil volatility and pushed Canadian yields higher (10-year up ~35 bps since the conflict began), but recent reopening signals out of the Strait of Hormuz eased near-term oil fears and saw WTI slip into the low-$80s, helping U.S. equities rally. U.S. data showed resilient consumption (retail & food services sales +1.7% in March; real spending +0.8%), while business surveys flagged rising input prices. The note highlights Fed leadership uncertainty and a heavy U.S. data calendar ahead, which together leave policy and market risks elevated. Overall market impact: stabilising core Canadian inflation supports a BoC hold (neutral for CAD), oil-driven geopolitics remain the key source of market volatility, and U.S. macro strength keeps investors focused on Fed reaction risks.