Canada’s main stock index rose Monday, boosted by a jump in oil prices, as investors prepare for crucial U.S. inflation data and the Federal Reserve’s monetary policy meeting later this week.
The Toronto Stock Exchange’s S&P/TSX Composite Index was up 62.76 points, or 0.3%, at 22,069.76.
Oil prices rose about 3% to their highest level in a week, buoyed by hopes of increased fuel demand this summer.
High oil prices pushed Toronto’s energy index up 1.4%.
“Over the past few weeks, we have seen a significant pullback in oil prices…the theory is that this pullback was probably exaggerated, and now we are seeing oil prices return to roughly the average price that was traded over the past 12 months,” Angelo Kourkafas, senior investment strategist at Edward Jones.
Investors took a cautious stance ahead of Wednesday’s U.S. consumer price data and the Fed’s policy meeting, which could influence market action and determine the timing and the extent of the country’s monetary policy easing this year.
“It will be a very busy week on the macroeconomic front in the United States, which is sure to have repercussions on Canadian markets. The Fed is not expected to cut rates, but the focus will be focused on updating economic projections,” Kourkafas said.
While the Bank of Canada (BoC) has already begun to ease its monetary policy by cutting rates by 25 basis points last week, investors are betting on a nearly 51% chance that the Fed will start cutting rates in september.
Meanwhile, manufacturing sales and wholesale trade data for April are expected to be released on Friday.
The materials sector, which includes metal miners and fertilizer companies, followed with a 1.3% gain, supported by higher prices for most metals, including gold and copper.
On the corporate side, bitcoin miner Bitfarms fell 3.6% after approving the adoption of a “poison pill” to fend off a possible hostile takeover attempt by rival Riot Platforms (reported by Khushi Singh in Bengaluru and Nivedita Balu in Toronto; edited by Shreya Biswas and Josie Kao).
