(fxcue news) - Canadian inflation data for the month of August is set to determine the mood on Bay Street Tuesday morning. The focus will also be on the Federal Reserve's monetary policy meeting that gets underway today. The Fed is expected to lower interest rate, but it is the size of reduction, and the post meeting statement that are being widely eyed. Statistics Canada will release the nation's inflation data for the month of August at 8:30 AM ET. Economists expect the report to show a 2.1% rise in prices in August, compared to the same month last year. Annual inflation came in at 2.5% in July. Core inflation increased by 1.7% in July, compared to the same month in the previous year, easing from 1.9% in June. Data on Canadian housing starts is due at 8:15 AM ET. The Canadian market extended gains to a fourth straight session and posted new record highs on Monday, with stocks from healthcare, technology and energy sectors moving higher. After opening modestly higher and moving in a tight range till noon, stocks gained in strength gradually and eventually closed on a firm note. The benchmark S&P/TSX Composite Index ended with a gain of 133.42 points or 0.57% at 23,702.07, a new closing high. The index hit a new record intraday high at 23,721.61. Asian stocks turned in a mixed performance on Tuesday as investors braced for the Federal Reserve's most anticipated meeting in years. A two-day policy meeting of the U.S. Federal Reserve gets underway later today, with markets seeing a nearly 70 percent probability of a bigger 50 bps rate cut to the 4.7-5 percent range on Wednesday. Gold ticked higher in Asian trading even as the dollar selloff paused ahead of the U.S. retail sales data for August due later in the day. Oil extended overnight gains due to disruptions in U.S. production caused by Hurricane Francine and expectations of a Federal Reserve interest rate cut. Markets in mainland China and South Korea were closed for public holidays. European stocks advanced on Tuesday ahead of the Federal Reserve's interest-rate decision on Wednesday and the Bank of England's announcement, due on Thursday. The Fed is widely expected to lower interest rates, but there remains some debate about the size of the rate cut. The U.K. CPI report due on Wednesday may significantly influence market speculation for the Bank of England (BoE) interest rate path for the last quarter of the year. Meanwhile, the headline German ZEW Economic Sentiment Index dropped further to 3.6 in September from 19.2 reported in August, a survey showed today. U.S. retail sales data for August along with comments by European Central Bank's supervisor Claudia Buch and board members Elizabeth McCaul and Frank Elderson may influence trading sentiment later in the day. In commodities, West Texas Intermediate Crude oil futures are up $0.14 or 0.2% at $70.23 a barrel. Gold futures are down $8.30 or 0.32% at $2,600.60 an ounce, while Silver futures are lower by $0.100 or 0.32% at $31.035 an ounce.