Bay Street Likely To Open Flat

(RTTNews) - Canadian shares are likely to open somewhat flat on Wednesday, tracking subdued commodity prices.

With the latest inflation data fueling hopes the Federal Reserve's tightening cycle will end soon, the market is unlikely to see any significant downside.

The Canadian market ended on a firm note on Tuesday as soft inflation data and a sharp rise in housing starts, as well as higher commodity prices helped underpin sentiment.

Energy and materials shares lifted the market higher. A few stocks from consumer discretionary and financials sectors too posted impressive gains.

The benchmark S&P/TSX Composite Index ended with a gain of 149.78 points or 0.74% at 20,376.57, a nine-week closing high.

Data from Statistics Canada showed the annual inflation rate in Canada fell to 2.8% in June of 2023, the lowest since March of 2021, after coming in at 3.4% in May. Over the previous month, the Consumer Price Index increased 0.1% in June.

Asian markets finished trading on a positive note on Wednesday, tracking Wall Street's overnight gains. A positive surprise on U.K. inflation also supported sentiment.

European stocks are broadly higher on Wednesday thanks to soft inflation data from the U.K., and rising expectations that the Federal Reserve's rate hiking cycle will end soon.

Data from the Office for National Statistics showing the nation's annual headline inflation falling to a 15-month low to 7.9% in June, down from 8.7% in May. Meanwhile, core inflation came in at 6.9%.

The drop in inflation has strengthened the case for a quarter point rate hike from the Bank of England rather than an aggressive half a percentage point increase at the August meeting.

Meanwhile, final data from Eurostat said the consumer price inflation rate in the Euro Area was confirmed at 5.5% in June 2023, the lowest level since January 2022. However, the core rate, which excludes volatile items such as food and energy, picked up to 5.5 percent, above a preliminary estimate of 5.4%.

In commodities, West Texas Intermediate Crude oil futures are up $0.12 or 0.15% at $75.87 a barrel.

Gold futures are down $4.00 or 0.2% at $1,976.80 an ounce, while Silver futures are down $0.051 or 0.19% at $25.205 an ounce.