04:23 PM EDT, 06/26/2024 (MT Newswires) -- The Toronto Stock Exchange struggled again on Wednesday following a day-prior slump, managing a just a minor gain on slumping metals price and doubts the Bank of Canada will cut interest rates again at its July 24 meeting after inflation ran hotter than expected in May.

The the S&P/TSX Composite Index ended the day up just 5.42 points, to finish at 21,793.9.

Base Metals and Industrials are the biggest gainers, up 1.6% and 0.5%, respectively.

Battery Metals, down 2.2% was the biggest decliner, as copper prices continued a month-long slump that cut its price by 10%.

Gold traded lower on Wednesday, falling for a second day as the dollar rose to the highest in nearly two months ahead of key U.S. inflation data coming on Friday. Gold for August delivery was last seen down US$21.70 to US$2,309.10 per ounce.

West Texas Intermediate (WTI) crude oil closed higher on Wednesday, even as a report showed U.S. oil inventories rose last week, on expectations that demand is on the rise. WTI crude oil for August delivery closed up US$0.07 to settle at US$80.90 per barrel, while August Brent crude, the global benchmark, closed up US$0.24 to US$85.25 per barrel.

Investors' faith the Bank of Canada will cut rates at its July meeting were shaken on Tuesday, after the surprise increase in May inflation. Still, Macquarie Group said it is sticking with its baseline call for a July cut, though it said yesterday's data cast some doubt on this timing.

"The eventual decision will hinge largely on the results of the BoC surveys next month and the CPI reading for June. The latter will need to show a significant moderation from May for the BoC to consider another rate cut," said David Doyle, head of U.S. economics at Macquarie.

Beyond July, Macquarie anticipates another 25 bps cut in October and a further 125 bps of cuts in 2025. It noted policy divergence with the Federal Reserve. is likely to become pronounced in coming quarters. By end 2025 Macquarie expects an overnight rate of 3.25%, 138 bps lower than its estimate for the Fed funds rate (4.63%).

CIBC, in a Fixed Income, Currency & Commodities (FICC) Strategy note said given the large upside surprise in the May CPI report, the likelihood of the BoC delivering another cut at its July meeting has been called into question. However, it also remains reluctant to write-off another cut just yet given that we will receive the April GDP, June Labour Force Survey, and June CPI report before the meeting. Moreover, the bank also noted, much of the strength in the May CPI report stemmed from travel services, which can be susceptible to movements in the currency.

But, CIBC said, given that part of the changes in travel service prices often unwind after a large move, and USD-CAD has been rangebound since the end of April, it doesn't expect to see another CPI surprise in the June report of the same magnitude to that seen in the May report. As such, CIBC continues to expect a July cut and a faster pace of easing from the Bank than is currently priced-in, and accordingly see value in the 2yr sector.