Canada Raw Materials Prices MoM: January’s 7.7% Surge Resets Market Expectations
Canada’s raw materials price index posted a 7.7% month-over-month increase in January 2026, according to official data released February 20. This outsized move follows a subdued 0.3% rise in December 2025, breaking a string of moderate readings and signaling renewed cost pressures across the supply chain.
Big-Picture Snapshot
Drivers This Month
- Energy inputs: +4.2pp
- Industrial metals: +2.1pp
- Forestry products: +0.7pp
- Agricultural materials: +0.5pp
Policy Pulse
January’s 7.7% MoM reading stands far above the Bank of Canada’s typical inflation comfort zone. The central bank’s target for headline inflation remains at 2%, underscoring the outsized nature of this raw materials price surge.Market Lens
Bond yields spiked and the Canadian dollar strengthened on the surprise print. Traders responded to the data by repricing inflation risk, with equities in resource-linked sectors outperforming while rate-sensitive names lagged.Foundational Indicators
Historical Context
January’s 7.7% jump is the largest since at least early 2021. The previous six months saw much milder swings: December 2025 at 0.3%, November at 1.6%, October at 1.7%, September at -0.6%, August at 0.3%, and June at -0.4%[1]. The 12-month average prior to January was just 0.5%.Market Lens
Commodity-linked equities and the loonie rallied sharply. The scale of the move caught many off guard, prompting a rotation into Canadian resource stocks and a selloff in government bonds.Drivers This Month
- Energy prices rebounded on global supply disruptions- Industrial metals gained on robust demand
- Forestry and agriculture posted moderate increases
Chart Dynamics
Policy Pulse
The Bank of Canada faces renewed scrutiny as raw materials inflation far exceeds its 2% target. Policymakers will monitor for pass-through effects to core inflation.Forward Outlook
Scenario Analysis
- Bullish (20–30%): Global supply normalizes, energy prices retreat, and MoM readings revert below 1% by spring.
- Base Case (50–60%): Input prices moderate but remain above the 12-month average, with MoM gains between 1–2% through Q2.
- Bearish (15–25%): Further supply shocks or geopolitical tensions push raw materials prices higher, sustaining MoM increases above 3%.
Market Lens
Volatility premiums have widened across asset classes. Investors are hedging against further upside surprises in commodity prices, while manufacturers brace for higher input costs.Data Source & Methodology
Figures are sourced from Statistics Canada and the Sigmanomics database[1]. The Raw Materials Price Index tracks weighted average price changes for key Canadian input commodities, including energy, metals, forestry, and agriculture.Closing Thoughts
Risks and Opportunities
The January surge in raw materials prices injects new uncertainty into Canada’s inflation outlook. Upside risks center on persistent supply constraints, while downside risks hinge on global demand cooling. For investors and policymakers, vigilance is warranted as cost pressures ripple through the economy.Market Lens
Resource-linked sectors are in focus as volatility returns. The outsized MoM gain has shifted market narratives, with attention now on how quickly—if at all—input costs will normalize.Key Markets Reacting to Raw Materials Prices MoM
Canada’s raw materials price surge has triggered notable moves across equities, forex, and crypto markets. Resource-linked stocks and the Canadian dollar saw immediate gains, while global risk sentiment shifted. The following symbols have shown the strongest historical correlations with raw materials price swings:
- AAPL — Sensitive to global supply chain costs; higher input prices can compress margins.
- USDCAD — Canadian dollar typically strengthens as commodity prices rise.
- BTCUSD — Crypto markets often reflect broader inflation and risk sentiment shifts.
| Year | Raw Materials Prices MoM (%) | USDCAD Movement |
|---|---|---|
| 2021 | +4.5 | CAD up 2.1% |
| 2023 | -1.2 | CAD down 1.4% |
| 2025 | +1.7 | CAD up 0.7% |
| 2026 | +7.7 | CAD up 2.8% |
Since 2020, sharp moves in Canada’s raw materials prices have consistently driven corresponding swings in the USDCAD pair, underscoring the currency’s sensitivity to commodity cycles.
FAQ
- What does the 7.7% MoM surge in Canada’s Raw Materials Prices mean?
- It signals a sharp acceleration in input costs, the largest monthly gain since 2021, with broad implications for inflation and markets.
- How does this spike compare to recent history?
- January’s 7.7% jump dwarfs December’s 0.3% and the prior 12-month average of 0.5%, marking a clear break from recent stability.
- Why is Raw Materials Prices MoM closely watched?
- This indicator is a leading gauge of cost pressures in the Canadian economy, influencing monetary policy and asset prices.
Canada’s raw materials price index just posted its sharpest monthly gain in years, resetting inflation and market expectations.
Updated 2/20/26
This has been drafted with AI assistance and then thoroughly reviewed, refined, and approved by our human editorial team to ensure accuracy, and originality.
- [1] Statistics Canada, Raw Materials Price Index (RMPI), official release February 20, 2026; Sigmanomics Economic Database, accessed February 20, 2026.








