TSX Futures Rise as Oil Prices Fall Easing Inflation Fears

The S&P/TSX Composite Index rose around 0.5% to above the 32,700 mark on Monday amid easing energy supply fears and cooling domestic inflation. Headline consumer price growth slowed more than anticipated to 1.8% in February which marks the softest rate since last summer and strengthens the case for the Bank of Canada to maintain its current policy path. While the resource-heavy index faced pressure last week from surging oil prices and geopolitical volatility the market is now stabilizing after US officials indicated that tankers are successfully transiting the Strait of Hormuz. Financials and technology shares are leading the advance with Shopify and BMO rising nearly 2% as top performers as investors recalibrate their expectations for global interest rates ahead of the Fed and BoC policy meetings. Energy heavyweights like Suncor and Canadian Natural Resources remained in focus following price target upgrades and a federal commitment to deliver 23.6 million barrels of oil to the IEA.

Futures tracking the S&P/TSX Composite Index were higher on Monday amid a halt in the surge of oil prices on ongoing Middle East conflict. Canadian bond yields edged lower as some tankers crossed the Strait of Hormuz and limited concerns of a prolonged energy shortage from the region. Also, energy Minister Tim Hodgson said Friday that the government is working with producers and refineries to ensure Canada delivers the full 23.6 million barrels pledged to the IEA, while preparing to expand natural gas exports in the coming months. In addition, brokerage Jefferies raised its price targets for several Canadian energy firms, including Cenovus, Suncor, and Canadian Natural Resources, citing improved cash flow expectations and firmer commodity assumptions.

The S&P/TSX Composite Index faced a difficult week as the benchmark shed 0.9% to close at 32,542 on Friday amid intensifying regional conflict and a souring domestic economic outlook. Investors reacted to Statistics Canada data showing a surprise loss of 83,900 jobs in February and an unemployment rate that climbed to 6.7% as manufacturing sales also declined. This domestic labor market deterioration pressured financial and technology heavyweights while energy producers continued to navigate high volatility as the Strait of Hormuz blockade kept crude prices elevated. At the same time, major bullion miners Agnico Eagle, Barrick Gold, and Wheaton Precious Metals tumbled between 3.4% and 4.3% as bullion prices buckled under the pressure of a stronger US dollar. Tech and financials also finished firmly in negative territory.