US core inflation for May came in at above the forecasted level but not by a sufficiently large margin to impact the prevailing narrative that the current inflationary period is transitory and will abate by later this year. That reaffirmation of the market’s expectation boosted confidence that central bank support will continue to prop up markets and asset prices for the foreseeable future. Risk assets traded up modestly in reaction. Stocks indices which have mostly been trading at or near record levels moved up slightly, oil traded up and is again near multi-year highs and CAD moved up by 0.3% against USD. The Canadian dollar declined steadily during the day yesterday after the release of a Bank of Canada statement that did not indicate a change in tone or policy and left rates and asset purchases unchanged. In a measure of how impactful the Bank of Canada’s shift to a less expansionary policy in April has been to the strengthening Canadian dollar, even the “no change” statement seemed to pressure the Canadian dollar. The move down resulting from the Bank of Canada statement and the move up resulting from the US inflation figure have brought USD to CAD right back to middle of the tight range in which it has been trading for the last month.