Investing.com - Canada’s main stock index is seen trading largely unchanged Monday, stabilizing after the previous session’s losses with central bank policy decisions in the spotlight.
Toronto Stock Exchange’s S&P/TSX Composite closed Friday 0.5%, or 166 points, lower at 31,311.41, with falling stocks outnumbered advancing ones by 500 to 426 and 76 ending unchanged.
Likely Fed cut boosts sentiment
The index closed lower on Friday, but had climbed to record highs earlier in the week due to a wave of upbeat domestic bank earnings.
Attention this week will be on the U.S. Federal Reserve, which is expected to ease monetary policy once more on Wednesday, especially after the delayed release of September’s core personal consumption expenditures price index — the Fed’s preferred inflation gauge — came in softer than expected on Friday.
That cooler inflation reading, combined with signs of a softening labor market and fragile consumer spending, has reinforced the case for the Fed to provide more policy support.
Bank of Canada also meeting
The Bank of Canada is also meeting on Wednesday, but is expected to keep its key interest rate steady at 2.25%, with many economists now predicting unchanged rates at least until 2027.
With inflation easing and firmly within the central bank’s target range and the economy growing at a robust pace, the need for further rate cuts has reduced significantly.
Gold mostly steady
Gold prices traded in a mostly steady manner, remaining at elevated levels as the U.S. dollar hovered near a five-week low, supported by firm expectations that the Federal Reserve will cut interest rates this week.
A run of softer economic data and Friday’s inflation figures strengthened market conviction that the central bank is preparing to loosen policy, though investor caution kept bullion gains modest.
Spot gold was last up 0.4% at $4,212.67 an ounce, and U.S. Gold Futures for February slipped marginally to $4,242.15 an ounce.
Crude falls from two-week highs
Oil prices fell back from two-week highs, with traders taking profits ahead of the likely Federal interest rate cut.
Brent futures dropped 1.1% to $63.08 a barrel, and U.S. West Texas Intermediate crude futures fell 1.1% to $59.43 a barrel.
Both contracts closed Friday’s trading session at their highest levels since November 18.
Aside from the Fed meeting, progress towards peace in Ukraine remains slow, and Reuters reported that the Group of Seven countries and the European Union are in talks to replace a price cap on Russian oil exports with a full maritime services ban, which would likely further curb supply from the world’s second-largest oil producer.
