Futures linked to the S&P/TSX Composite Index inched higher on Monday, as easing oil prices helped temper inflation concerns. Crude extended its pullback below pre-conflict levels after OPEC+ agreed to increase production targets again from August, while recovering exports through the Strait of Hormuz improved the outlook for global supply.
At the same time, expectations for a Federal Reserve rate hike this year diminished after last week’s weaker-than-forecast US jobs report, reinforcing the view of a cooling labor market. These factors bolstered bets that the Bank of Canada will keep interest rates unchanged, sending Canadian bond yields lower and alleviating worries about borrowing costs. That, in turn, provided support for financial stocks and the broader equity market. The BoC’s next policy decision is scheduled for July 15.
Meanwhile, gold prices slipped as the US dollar stabilized following last week’s decline, putting pressure on mining shares.
