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Bay Street Seen Opening Lower; Inflation Data Eyed

Lower Canadian and U.S. futures indicate a weak start for the Canadian market on Wednesday. Inflation data for the month of May is expected to significantly impact stock price movements.

Canadian inflation data for May is due at 8:30 AM ET. Canada's annual inflation rate quickened to 6.8% in April of 2022, the highest since January of 1991 and slightly above market expectations of 6.7%.

Core consumer prices in Canada increased 5.7% year-on-year in April of 2022, the most on record. On a monthly basis, consumer prices increased 0.7% in April, slowing from a 1% rise in the prior month.

In company news, Empire Company Limited (EMP.A.TO) reported earnings per share of $0.68 for the fourth quarter of financial year 2022, compared to $0.64 in the fourth quarter of the previous financial year.

The market will also be eyeing the Federal Reserve Chairman Jerome Powell's testimony before the Senate about the state of the economy this morning, for clues about the central bank's future monetary policy stance. The Fed raised interest rates by 75 basis points last week and signaled more hikes in the coming months.

Investors are also likely closely follow the developments regard to President Joe Biden's take on the federal tax on gasoline. According to reports, Biden might temporarily suspend the 18.4-cents a gallon federal tax on gasoline.

The Canadian market ended on a positive note on Tuesday, led by gains in energy stocks. The benchmark S&P/TSX Composite Index rose 73.66 points or 0.4% to 19,257.29 continuing to regain ground after ending last Friday's trading at its lowest closing level in over a year.

Asian stocks ended broadly lower on Wednesday despite as inflation and interest-rate concerns took center stage ahead of congressional testimony by Fed Chair Jerome Powell.

European stocks down firmly in negative territory amid rising worries about inflation and interest rate hikes.

In commodities trading, West Texas Intermediate Crude oil futures are down $5.65 or 5.16% at $103.87 a barrel.

Gold futures are up slightly at $1,839.00 an ounce, while Silver futures are down $0.333 or 1.52% at $21.425 an ounce.

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