TSX Futures Fall as Inflation Fears Rise

Futures tracking Canadian stocks fell on Thursday amid elevated oil prices and bond yields. Oil extended its rally following the biggest wave of attacks on shipping in the Strait of Hormuz by Washington and Tehran on Wednesday. Global yields moved higher on fears of prolonged inflation, following stronger-than-expected US PPI and ahead of CPI data expected Friday. Rising expectations for a Fed rate hike pressured credit-sensitive stocks, while falling gold prices weighed on miners. Elsewhere, Enbridge said Wednesday it would buy Tallgrass Energy’s crude oil business for $2.55 billion in cash, expanding its US liquids pipeline network by acquiring a majority stake in the Pony Express Pipeline and other assets.

The S&P/TSX Composite Index fell 0.6% to close at 35,907 on Wednesday after the US expanded trade restrictions on Canada. The US banned imports of numerous alcoholic beverages, motorcycles and dairy products, following 50% tariffs imposed last month on about $20 billion of Canadian goods and retaliatory tariffs from Canada. Saputo lost 0.7%, Canada Packers shed 3.1%, and BRP fell 4%. Meanwhile, intensifying Middle East hostilities pushed oil prices higher, rekindling inflation fears ahead of Friday’s US CPI data. Banks came under pressure amid increased rate-hike expectations, with RBC and TD Bank down 0.9%, BMO losing 1.3%, and CIBC shedding 1.5%. Miners gained on higher gold prices, with Agnico Eagle adding 0.7%, Barrick rising 1.2%, and WPM up 1.4%. Lithium Americas jumped 6.5% after J.P. Morgan initiated coverage with an “overweight” rating.

The S&P/TSX Composite Index edged lower to trade near 36,000 on Wednesday after the US expanded trade restrictions on Canada. The US banned imports of numerous alcoholic beverages, motorcycles and dairy products, following 50% tariffs imposed last month on about $20 billion of Canadian goods and retaliatory tariffs from Canada. Saputo lost more than 1%, Canada Packers nearly 2%, and BRP about 1%. Meanwhile, intensifying Middle East hostilities pushed oil prices higher, rekindling inflation fears ahead of Friday’s US CPI data. Banks came under pressure amid increased rate-hike expectations, with RBC, TD Bank, BMO and Scotiabank losing more than 1% each. Miners gained on higher gold prices, with Agnico Eagle, Barrick and WPM adding over 2%. Lithium Americas jumped more than 6% after J.P. Morgan initiated coverage with an “overweight” rating.