Futures on Canada’s S&P/TSX Composite Index advanced 0.2% to 2,147.10 points on Monday, recovering from Friday’s 0.76% decline that was led by weakness in gold futures and broad-based losses across materials, clean technology and technology stocks.
The advance comes ahead of the Bank of Canada’s interest-rate decision scheduled for Wednesday, where the policy rate is widely expected to remain unchanged at 2.25% for a seventh consecutive meeting. Core inflation has held near the central bank’s 2% target, though financial markets are pricing in roughly 75 basis points of cumulative rate hikes over the next twelve months.
The Bank of Canada’s April 29 meeting minutes noted that significant U.S. trade restrictions could prompt further easing to support growth, a scenario markets are monitoring alongside upcoming labor data. Canada’s August employment report, due Friday, is forecast to show net job creation of 15,000 positions, following a surge of 75,100 in July, while the unemployment rate is projected to hold at a two-year low of 6.4%.
Geopolitical developments over the weekend added pressure to energy markets, with U.S. airstrikes on Iranian rocket launchers at Larak Island followed by retaliatory strikes on American positions in Jordan. Major global crude benchmarks surged nearly 3%, pushing prices above US$90 per barrel. The S&P/TSX Composite’s materials and energy sectors are sensitive to such oil-price volatility, contributing to Friday’s broad-based retreat.
