TSX futures fall ahead of US inflation, Canada GDP data

(Reuters) -Futures tied to Canada's main stock index slipped on Friday as investors turned cautious ahead of domestic GDP data and a key U.S. inflation report, seeking cues on potential interest rate cuts in the neighboring economies.

Futures on the S&P/TSX index fell 0.21% by 06:21 a.m. ET (1021 GMT). The S&P/TSX composite index ended flat on Thursday as investors rushed to book profits on gains seen earlier in the week, particularly from banking stocks.

The U.S. Federal Reserve's favored inflation gauge - personal consumption expenditures prices - is due later in the day and could sway market expectations for a rate cut next month.

According to the CME Group's FedWatch tool, the odds for a 25 basis point cut in September are 85.2%.

Back home, Gross Domestic Product figures will be assessed to gauge the impact of tariffs on the economy. Estimates show GDP likely has expanded 0.1% in June on a monthly basis after a contraction in May.

On an annualized basis, the economy is expected to have contracted 0.6% in the second quarter.

Traders see at least one rate cut by the Bank of Canada later this year.

Oil prices fell on Friday due to expectations of lower demand as the summer driving season in the U.S. ends. But the prices were set for a weekly gain. [O/R]

Gold prices edged lower, but were on track for a monthly gain. [GOL/]

The week was highlighted by strong earnings from Canada’s top lenders. Easing risks from trade tensions with the U.S. allowed banks to set aside lower-than-expected provisions for bad loans.

Canada's benchmark index is headed toward its fourth straight monthly gain.

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($1 = 1.3817 Canadian dollars)

(Reporting by Nikhil Sharma; Editing by Sahal Muhammed)