Canadian stock index futures advanced on Monday, with the S&P/TSX Composite Index futures up 0.2% to 2,147.10 points, following a 0.76% decline in the main index on Friday.
The gain came as global crude oil benchmarks jumped nearly 3% past $90 a barrel, driven by escalating Middle East tensions after U.S. strikes on Iranian rocket launchers on Larak Island and retaliatory attacks on U.S. positions in Jordan over the weekend. Energy-heavy constituents on the TSX are expected to benefit from the oil price surge, offsetting losses in gold futures and declines across materials, clean technology and technology shares that weighed on Bay Street on Friday.
Investors are positioning ahead of Wednesday's Bank of Canada (BOC) policy decision, where policymakers are widely expected to maintain the benchmark interest rate at 2.25% for a seventh consecutive meeting. Market pricing indicates nearly 75 basis points of potential rate increases over the next twelve months, despite core inflation remaining near the central bank's 2% target.
The BOC's April 29 meeting minutes noted that further rate cuts could be deployed if new U.S. trade restrictions significantly impair Canadian economic activity. Attention will also focus on Friday's August Labor Force Survey, which is projected to show an addition of 15,000 jobs, following July's surge of 75,100 jobs, while the unemployment rate is expected to hold at a two-year low of 6.4%.
Geopolitical developments in the Middle East continue to influence market sentiment, with the latest escalation adding to volatility across risk assets.
