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

(RTTNews) - Canadian shares look headed for a positive start on Wednesday, tracking firm European stocks and higher commodity prices.

The focus will be on the Bank of Canada's interest rate decision, due at 10 AM ET, and data on U.S. consumer price inflation.

The central bank is widely expected to raise interest rate by 25 basis points. The accompanying statement is eyed for clues about the bank's future policy stance.

The central bank unexpectedly raised the target for its overnight rate by 25bps to 4.75% in June, after pausing the tightening campaign in the previous two meetings.

Analysts expect a slowdown in U.S. consumer price growth to an annual rate of 3.1% from 4% in May. The core rate is likely to have fallen for a third month to 5% from 5.3%.

The Fed is likely to raise its benchmark interest rate later this month by 25 basis points to a 5.25-5.5% range after the pause seen in June's FOMC meeting.

The Canadian market ended modestly higher on Tuesday after a lackluster session. The benchmark S&P/TSX Composite Index settled with a gain of 56.11 points or 0.28% at 19,878.56.

Asian stocks turned in a mixed performance on Wednesday as investors awaited U.S. consumer inflation data that will provide more clarity on the Federal Reserve's monetary policy plans.

European stocks are up firmly in positive territory Wednesday afternoon with focus shifting to U.S. inflation data due later in the day. U.K. stocks outperformed regional peers after the Bank of England said its annual stress test of eight major lenders showed that each could cope with rising interest rates in a stressed environment, and none would need to raise additional capital.

In commodities, West Texas Intermediate Crude oil futures are up $0.34 or 0.45% at $75.17 a barrel.

Gold futures are up $2.70 or 0.14% at $1,939.80 an ounce, while Silver futures are gaining $0.104 or 0.45% at $23.385 an ounce.