(Toronto) The Toronto Stock Exchange closed Monday’s session with a gain of 0.41%, while the loonie also climbed.
Posted at 4:34 p.m.
Updated at 5:18 p.m.
Rosa Saba
The Canadian Press
These gains came as media reported that Donald Trump would likely refrain from imposing tariffs on Canadian exports to the United States on his first day in office.
The S&P/TSX composite index on the Toronto floor gained 103.66 points to end the session with 25,171.58 points.
US and commodity markets were closed on Martin Luther King Day.
On the currency market, the Canadian dollar traded at an average rate of 69.78 US cents, up from 69.28 US cents on Friday.
Canadian markets were boosted by energy companies on Monday, observed Brian Madden, chief investment officer at First Avenue Investment Counsel, with the TSX energy index up 2.3%.
This is likely due to the inauguration of US President Donald Trump, he suggests, as some of his policy promises would benefit the industry.
The widespread cold snap is also likely to play a role, boosting demand for natural gas, he adds.
Beyond the potential gains for energy, a lot is at stake with the new president in office, Mr. Madden says.
-If Mr. Trump introduces the 25% tariffs he threatens to impose on Canadian products, “what is at stake for the economy is a trillion-dollar trade flow and , potentially, a deep recession,” he says.
Customs duties would also weaken the loonie, according to Mr. Madden.
The Bank of Canada’s latest business and consumer outlook surveys, released Monday, showed sentiment improving despite concerns about potential tariffs.
On Tuesday, the December inflation report will be released, and Madden expects the moderation to continue.
“Inflation has behaved rather well here in Canada, much more than in the United States,” he recalls, which allows the Bank of Canada “to make much faster and deeper cuts” than its American counterpart.
“This is likely the last important piece of data that the Bank of Canada will review before making its decision for the January 29 meeting. »
Mr. Madden expects the central bank to make another cut at this meeting, as the divergence between the interest rate policies of the Bank of Canada and the U.S. Federal Reserve continues to widen. accentuate, which weighs on the Canadian dollar.
“The United States…has not put the lid on inflation at all,” he points out, and some of Donald Trump’s policies, notably tariffs, could also put upward pressure on inflation. consumer prices.
“The Fed is still tight, and that may be because the job market is good, the economy is good, and inflation is still a problem,” he concludes.
