Canadian Market Likely To Open On Cautious Note; BoC Rate Decision In Focus

(RTTNews) - Canadian shares are likely to open lower on Wednesday, tracking weak commodity prices. The Bank of Canada's interest rate decision, and quarterly earnings updates are likely to set the trend for the market.

The Bank of Canada's interest rate decision is due at 10 AM ET.

The central bank is widely expected to hold rates unchanged as economic growth stalled in the fourth quarter of 2022.

The accompanying statement from the bank will be in focus for clues about future rate hikes.

Data released by Statistics Canada showed the nation recorded a trade surplus of C$1.92 billion in January 2023. Exports increased to $67.02 billion in the month from C$64.3 billion a month earlier, while imports surged to C$65.1 billion from C$63.1 million in the previous month.

Nuvei Corporation (NVEI.TO) reported djusted net income of $68.0 million for the first quarter of 2023, down 4% from $70.6 million a year ago.

Stella-Jones Inc (SJ.TO) reported a net income of $36 million for the fourth quarter of 2022, compared with net income of $22 million a year ago.

Nuvista reported net earnings of $159.3 million for the fourth quarter of 2022, compared with net income of $113.2 million in the year-ago quarter.

Canadian stocks tumbled on Tuesday after Federal Reserve Chair Jerome Powell warned interest rates will likely remain higher for longer than previously expected to fight inflation.

Citing stubbornly elevated inflation and stronger than expected economic data, Powell said in his testimony before the Senate Banking Committee that "ultimate level of interest rates is likely to be higher than previously anticipated."

Powell also said the Fed would be prepared to reaccelerate the pace of rate hikes if the totality of incoming data were to indicate that faster tightening is warranted.

Additionally, the Fed chief reiterated the central bank will likely need to maintain a restrictive stance of monetary policy for "some time" in order to restore price stability.

The dollar's surge, and falling crude oil and bullion prices weighed on Canadian stocks.

The benchmark S&P/TSX Composite Index ended with a loss of 239.26 points or 1.17% at 20,275.54, after hitting a low of 20,236.45.

Asian stocks ended lower on Wednesday as hawkish comments from Fed Chair Jerome Powell on the first day of his semiannual two-day testimony before Congress stoked concerns about interest rates being hiked by 50 basis points at the March FOMC meeting.

European stocks are turning in a mixed performance in cautious trade amid concerns about further rate hikes by the Federal Reserve.

In commodities trading, West Texas Intermediate Crude oil futures are down $0.41 or 0.52% at $77.17 a barrel.

Gold futures are lower by $2.70 or 0.14% at $1,817.30 an ounce, while Silver futures are down $0.49 or 0.21% at $20.150 an ounce.