Canada’s raw materials prices fell by 0.6% in the latest report, a significant decline from the previous month’s increase of 0.3%. This marks a 0.9 percentage point drop, indicating a downward trend in the cost of raw materials.
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The actual decrease of 0.6% sharply contrasts with the analyst estimate of a 1.2% rise, suggesting unexpected deflationary pressures in the raw materials sector. This unexpected drop is likely to impact commodity-related stocks negatively, particularly in the mining and materials sectors. The market reaction may be short-term, driven by sentiment, as investors reassess their inflation and growth expectations based on these new data.