Futures contracts linked to Canada’s main stock index fell Tuesday on lower crude prices as investors returned from a long weekend and struck a cautious tone ahead of key domestic inflation data.
December S&P/TSX index futures were down 0.3% as of 6:01 a.m. ET (10:01 GMT).
All eyes were on Canada’s Consumer Price Index (CPI) data, due at 8:30 a.m. ET, which could give investors signals about the extent of the bank’s interest rate cut central during its general policy meeting on October 23.
The data is expected to show the annual inflation rate fell to 1.8% in September, below the Bank of Canada’s 2% target, which it managed to maintain in August.
Operators currently estimate the chances of a sharp reduction of 50 basis points at 47.2%, and the chances of a reduction of a quarter point at 52.8%.
The central bank has already cut rates three times this year, and at its September meeting it stressed the need to prevent inflation from falling too far due to weak economic growth.
Canada’s energy sector could take a hit as oil prices fell more than 4% on weaker demand prospects and after reports indicated Israel is unwilling to strike Iranian oil targets. [O/R]
The materials sector could take inspiration from gold prices which have stabilized and copper prices which have fallen to their lowest level in three weeks. [GOL/] [MET/L]
The composite index hit a record high Friday in a broad-based rally as investors welcomed U.S. bank profits and moves to lower global borrowing costs.
On the corporate side, brokerage CIBC downgraded the stock of Canadian technology company VerticalScope Holdings from “Outperform” to “Neutral.”
RAW MATERIALS
Or : 2 654,2 $ ; +0,1 % [GOL/]
US crude: $70.19; -4.9% [O/R]
Brut Brent : 73,73 $ ; -4,8% [O/R]
FOR NEWS FROM CANADIAN MARKETS, CLICK ON THE CODES:
TSX Market Report [.TO]
Canadian Dollar and Bonds Report [CAD/] [CA/]
Reuters Global Stock Poll for Canada
Canadian Markets Directory
($1 = 1.3808 Canadian dollars)
