Bay Street Likely To Open On Cautious Note; Inflation Data In Focus

(RTTNews) - The Canadian market is likely to see a cautious start Tuesday morning with investors reacting to the nation's consumer price inflation data.

The focus is also on the upcoming meet of finance leaders from the Group of Seven industrialized democracies. The leaders are expected to strive for unity on non-tariff issues. Still, there is uncertainty about a consensus as the U.S. President seems intent on pushing allies to serve U.S. interests.

Canadian inflation data for the month of April is due at 8:30 AM ET.

The annual inflation rate in Canada fell to 2.3% in March, from an eight-month high of 2.6% in February. On monthly basis, inflation rose by 0.3% from a month earlier, according to Statistics Canada.

The annual core inflation rate in Canada which excludes eight of the most volatile components such as food, energy and mortgage interest costs, slowed down after three months, coming in at 2.2% in March from an over one-year high of 2.7% in the prior month. On a monthly basis, core consumer prices rose by 0.1% in March, slowing from a 0.7% increase in the prior month.

Despite early weakness, Canadian stocks closed modestly higher on Friday, showing a notable turnaround over the course of the trading day. The market remained closed on Monday for Victoria Day holiday.

The benchmark S&P/TSX Composite Index rose 74.45 points or 0.3% at 25,971.93, closing higher for the ninth consecutive session.

While profit taking contributed to initial weakness on Bay Street, buying interest re-emerged as the day progressed amid continued optimism about U.S. trade policy after Monday's news of the U.S.-China trade deal.

Asian stocks ended mostly higher on Tuesday after China and Australia cut interest rates as expected.

Investors stayed focused on the outcome of U.S. trade negotiations with India and Japan, following a 90-day pause on reciprocal tariffs between the U.S. and China.

European stocks are broadly higher on Tuesday with several counters attracting buyers amid easing concerns about tariffs. Investors are also reacting to quarterly earnings updates.

In commodities trading, West Texas Intermediate Crude oil futures are down $0.28 or 0.45% at $62.41 a barrel.

Gold futures are gaining $10.00 or 0.31% at $3,243.50 an ounce, while Silver futures are up $0.198 or 0.61% at $32.705 an ounce.