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

(RTTNews) - Bay Street is set to open on a cautious note on Tuesday with investors reacting to Canadian inflation data for the month of February, and looking ahead to the Federal Reserve's rate decision on Wednesday.

Traders and economists remain split on whether the Federal Reserve will pause or go forward with a smaller 25-bps rate hike at the conclusion of a two-day policy meeting on Wednesday.

Data on Canadian inflation for the month of February is due at 8:30 AM ET.

Canada's annual inflation rate fell to 5.9% in January of 2023, the least since February 2022, slowing from the 6.3% in the previous month amid base-year effects. On a monthly basis, the Canadian CPI rose by 0.5%, rebounding from the 0.6% drop in the previous month.

Core inflation rate in Canada eased to 5% in January of 2023 from 5.4% in December. It is the lowest reading since February of 2022.

In company news, BlackBerry Ltd. (BB.TO) announced that it has entered into an agreement to sell substantially all of its non-core patents and patent applications to Malikie Innovations Ltd. for a combination of cash at closing and potential future royalties in the aggregate amount of up to $900 million.

The Canadian market ended on a firm note on Monday, lifted by gains in energy and communications stocks.

News about UBS Group acquiring troubled lender Credit Suisse, and the Federal Reserve's announcement that it has joined with other central banks to take coordinated action to enhance the provision of liquidity via the standing U.S. dollar liquidity swap line arrangements helped lift investor sentiment.

The benchmark S&P/TSX Composite Index ended with a gain of 131.71 points or 0.68% at 19,519.43, after staying positive right through the day's session.

Asian stocks ended broadly higher on Tuesday as active steps to rescue distressed banks in the U.S. and Europe helped ease fears of a banking crisis.

The upside remained capped as investors awaited cues from the Federal Reserve's guidance at a pivotal monetary policy meeting.

European stocks are notably higher, with investors continuing to react positively to the steps taken by governments and central banks to rescue the distressed financial sector.

In commodities trading, West Texas Intermediate Crude oil futures are up $1.06 or 1.57% at 68.70 a barrel.

Gold futures are down $15.70 or 0.8% at $1,967.10 an ounce, while Silver futures are lower by $0.126 or 0.55% at $22.520 an ounce.