Bay Street May Open Slightly Weak; Inflation Data In Focus

(RTTNews) - Weak crude oil prices and European stocks point to a negative start for the Canadian market Tuesday morning. However, the data on Canadian inflation, due ahead of the opening bell, is expected to set the mood for the market.

Canadian inflation data for the month of May is due at 8:30 AM ET. A report on Canadian manufacturing sales is also due at the time.

The annual inflation rate in Canada eased to 2.7% in April of 2024 from 2.9% in the earlier month, marking the softest rate of consumer price growth since March 2021. Consumer prices in Canada rose by 0.5% from the prior month in April of 2024, slowing slightly from the 0.6% increase in March.

Annual core inflation rate in Canada slowed to 1.6% in April of 2024, the lowest level in three years, after coming in at 2% in March. Core inflation in Canada dropped to 0.2% (month-on-month) in April from an eight-month high of 0.5% in March 2024.

Speaking at the Winnipeg Chamber of Commerce on Monday, the Bank of Canada Governor Tiff Macklem said the Canadian economy is on track for a soft landing.

Macklem said the Canadian economy appears to be on track for a soft landing where inflation falls back to the bank's target without a major spike in unemployment. "We continue to think that we don't need a large rise in the unemployment rate to get inflation back to the 2% target," he said.

The Canadian market ended on a strong note on Monday with its benchmark S&P/TSX Composite Index recording its biggest increase in about seven weeks.

The S&P/TSX Composite Index ended with a gain of 293.73 points or 1.36% at 21,848.59. The index touched a low of 21,585.30 and a high of 21,866.93 in the session.

Asian stocks ended mostly higher on Tuesday after China's Premier Li Qiang said the country is capable of achieving the full year growth target of around 5%.

European stocks are notably lower on political concerns, after French President Emmanual Macron warned that a victory for the far left or the far right in this month's snap election could spark "civil war."

Macron has reportedly vowed to remain in office until May 2027 regardless of the outcome of the parliamentary elections on June 30 and July 7.

In commodities, West Texas Intermediate Crude oil futures are down $0.48 or 0.59% at $81.15 a barrel.

Gold futures are up $2.10 or 0.1% at $2,346.50 an ounce, while Silver futures are gaining $0.075 or 0.25% at $29.600 an ounce.