The Daily Chase: Canada’s inflation rate falls below 3%

Here are five things you need to know this morning.

All eyes on CPI: The latest inflation numbers for Canada’s economy are out, and the headline number fell by much more than expected, with prices increasing at a 2.9 per cent annual pace in the year up to January. That’s down from December’s 3.4 per cent level and much lower than the 3.3 per cent pace that economists were expecting. Food price inflation eased and energy costs fell. Core inflation also eased, although not by as much as the headline rate. Shelter costs are still going up at a much faster rate than homeowners, tenants and even the Bank of Canada would like to see, but overall the news was good for borrowers and consumers feeling tapped out by stubbornly sticky inflation.

Home Depot and Walmart earnings: Speaking of tapped out consumers, two sets of numbers from large U.S. retailers reminded investors on Tuesday that it’s not just a Canadian problem. Walmart and Home Depot released quarterly earnings before stock markets opened on Tuesday and while the former beat expectations on same-store sales and adjusted earnings, the world’s largest retailer warned that it expects consumers to be selective in their spending for this coming year. Numbers for Home Depot were even weaker, as the DIY chain reported same store sales have now declined for five quarters in a row. “2023 was a year of moderation,” CEO Ted Decker said.

BTC tops $1T again: The long-term outlook for bitcoin is as volatile as ever, but the world’s largest cryptocurrency has made steady gains since the SEC approved a slew of ETFs last month. After crossing above the US$50,000 level last week, bitcoin’s total market cap now tops $1 trillion – a level it hasn’t hit since the frenzied days of 2021. Trading in bitcoin has now risen for four months in a row and at $1.4 trillion in January that figure is now at its highest level since the summer of 2022.