CAD flows: USD/CAD little changed after CPI

Canadian CPI essentially in line with consensus at -0.4% with median CPI slightly below but common CPI slightly above consensus. Canadian yields are a little lower on the day, but only marginally lower after the data, with most of the decline having been seen overnight. USD/CAD is slightly lower after the data, but the focus is likely to be very much on whether Trump follows through with his threat to introduce 25% tariffs on February 1. It still looks odds on this will be negotiated away, and at this stage there is no real risk premium in the CAD over and above what is captured in Canadian yields. But if the tariffs are not introduced, the risks are on the downside for Canadian yields and USD/CAD.