TSX futures rise as Fed rate cut hopes rise

Askume, Sept 16 – Canada’s main stock index futures rose ahead of the Federal Reserve’s monetary policy decision on Monday as investors expected the Fed to cut interest rates significantly.

S&P/TSX futures were up 0.1% at 6:01 a.m. ET (10:01 GMT).

The probability that the Federal Reserve will cut interest rates by a substantial 50 basis points at the end of its two-day meeting on Wednesday has risen to 59% from 30% last week, according to CME Group’s FedWatch tool.

Meanwhile, Bank of Canada Governor Tiff Macklem has opened the door to accelerating rate cuts, the Financial Times reported Sunday. He told the paper that rate setters are concerned about the potential impact of lower oil prices on Canada’s labor market and economy.

The materials sector is expected to benefit from record gold prices amid a weaker US dollar and expectations of interest rate cuts. Copper prices, on the other hand, declined.

The composite index (GSPTSE) hit a second consecutive all-time high on Friday as investors got excited by the possibility of a rate cut.

Washington is Canada’s largest trading partner, and a sharp U.S. interest rate cut could also benefit the country’s resource-intensive stock market.

Canada’s energy industry remains in focus as oil prices rise on hopes of rate cuts.

On the data front, the market will focus on manufacturing sales data which is expected to be released at 8:30 am ET.

In addition to key consumer price data, focus will be on producer prices and retail sales data later this week.

In corporate news, Air Canada (AC.TO) on Sunday reached a last-minute agreement with its pilot union on a new four-year collective deal , ending a standoff over pay and benefits and preventing a strike or strikes in the near future .