Canadian shares are anticipated to open slightly lower on Wednesday morning, as the energy and materials sectors may face challenges due to weak commodity prices.
Investor sentiment is likely to be hampered by uncertainty surrounding U.S. interest rates, deterring them from making substantial moves. The minutes from the Federal Reserve's latest policy meeting, expected later today, might offer insights into the central bank's interest rate trajectory.
On Tuesday, the Canadian market reached a fresh closing high, edging up marginally after trading within a narrow range. Data indicating a slowdown in consumer price inflation spurred hopes that the central bank might soon lower interest rates.
The benchmark S&P/TSX Composite Index, which initially rose to 22,554.98, quickly pared most of its gains and remained in a tight range before closing at 22,416.01—up 2.79 points or 0.01% from the previous close.
Statistics Canada reported that the annual inflation rate in Canada eased to 2.7% in April from 2.9% in the prior month, the lowest rate of consumer price growth since March 2021. This was in line with the Bank of Canada's expectations, which predicted inflation would hover around 3% in the first half of the year before falling below 2.5% in the second half, indicating that rate cuts are "getting closer."
Consumer prices in Canada rose by 0.5% in April 2024, slightly down from the 0.6% increase in March. The annual core inflation rate slowed to 1.6% in April 2024—the lowest in three years—down from 2% in March.
Asian stocks ended mixed in range-bound trading on Wednesday as investors awaited cues from AI chip leader Nvidia's earnings and the release of the Federal Reserve's recent meeting minutes. Diminished optimism regarding China's economic recovery and ongoing geopolitical uncertainties also kept investors on the sidelines.
European stocks are trading lower, impacted by data showing a larger-than-expected increase in the UK's consumer price inflation for April. UK inflation came in at 2.3% annually, surpassing the forecast of 2.1%, but remained closer to the Bank of England's 2% target compared to March's 3.2% reading.
In the commodities market, West Texas Intermediate Crude oil futures are down by $0.59 or 0.76%, trading at $78.07 per barrel. Gold futures have decreased by $12.00 or 0.49%, now at $2,413.90 an ounce, while Silver futures are down by $0.148 or 0.46%, trading at $31.930 an ounce.
