Bay Street Seen Opening On Cautious Note; BoC Rate Decision, U.S. Inflation Data In Focus

(RTTNews) - Canadian shares are likely to open on a cautious note on Wednesday, with the focus on the Bank of Canada's interest rate decision. Weak European markets and concerns about growth might weigh on sentiment.

The central bank is widely expected to hike rates by 75 basis points from 1.5% to 2.25% to fight inflation. According to a Reuters report, economists expect interest rate to rise to 3.25% by year-end.

The Canadian central bank raised the target for its overnight rate by 50 basis points to 1.5% on June 1st 2022, in line with expectations, and signaled that it will hike interest rates further in the coming meeting to curb rising inflation. It was the third consecutive rate hike.

Data on U.S. consumer inflation for the month of June is also likely to significantly impact stock price movements. Economists forecast U.S. headline inflation accelerated to 8.8% year-on-year in June, marking a 40-year high.

Canadian stocks moved to the downside during trading on Tuesday, extending the downward move seen over the two previous sessions.

The benchmark S&P/TSX Composite Index came under pressure late in the session, closing down 138.16 points or 0.7 percent at 18,678.64.

The late-day weakness came as traders looked ahead to the U.S. Labor Department's report on consumer price inflation in the month of June.

Asian stocks ended broadly higher in cautious trading on Wednesday as investors awaited the release of a highly anticipated U.S. inflation report later in the day.

European stocks are down firmly in negative territory with investors largely staying cautious ahead of the release of U.S. inflation data for the month of June.

In commodities trading, West Texas Intermediate Crude oil futures are up $0.87 or 0.91% at $96.71 a barrel.

Gold futures are up $2.30 or 0.14% at $1,727.10 an ounce, while Silver futures are down marginally at $18.940 an ounce.