Canada's main stock index was set to open higher on Wednesday as crude oil prices recovered, while investors were cautious ahead of Bank of Canada's decision later in the day, where it is expected to announce a 75 basis point hike to tamp down surging prices.

Futures on the S&P/TSX index were up 0.2% at 06:28 a.m. ET (1028 GMT).

Oil prices rose on threats that Russia will walk away from its energy supply contracts, reversing losses from earlier in the session when prices fell to their lowest since Russia invaded Ukraine.

All eyes are on the Bank of Canada which is widely expected to announce another supersized interest rate increase at 10 a.m. ET, as it battles to curb inflation at a near-four-decade high, with investors also looking to gauge for any change to its aggressive stance.

It is the first rate decision since the central bank surprised with a 100 basis point hike in July and while the consensus is for a 75 basis point move this time, some forecasters are not ruling out another surprise to lift interest rates clearly into restrictive territory in one-go.

Money markets have fully priced in a 75 basis point move, with two more 25 basis point increases to end 2022 at 3.75%.

"We expect an overall hawkish statement with additional rate hikes still expected as the policy rate moves into restrictive territory. Overall, the statement should say more work still to be done to control unacceptably high underlying inflation," Veronica Clark, Economist at Citigroup said in a note.

Canada's headline inflation rate eased to 7.6% in July from 8.1% in June, but it is still nearly four times the central bank's 2% target. Meanwhile, gross domestic product data last week showed that the economy grew at a slower rate than expected.

Dow e-minis were up 35 points, or 0.11% at 06:28 a.m. ET, while S&P 500 e-minis were up 6.25 points, or 0.16% and Nasdaq 100 e-minis were up 28.5 points, or 0.24%. (Reporting by Aniruddha Ghosh in Bengaluru; editing by Milla Nissi)