TSX Futures Rise on Commodity Rally and Mideast Tensions
TSX futures rose 0.7% on Monday as oil prices climbed above $116 a barrel amid Mideast conflict. Investors now expect three rate hikes from the Bank of Canada.
Futures for the resource-heavy stock index in Canada edged upward on Monday as a rally in commodity prices offset broader geopolitical concerns. The market movement coincides with the fifth week of a widening conflict involving the United States, Israel, and Iran.
June futures on the S&P/TSX composite index rose 0.7% by 5:02 a.m. ET. While the main index climbed 2.1% last week, March is still positioned to potentially be the worst performing month for Canadian equities since June 2022.
The risk of a broader regional war intensified on Saturday after Houthi rebels in Yemen launched their first missile strike against Israel. This escalation has significantly impacted energy markets, with Brent Crude Oil surging 59% so far this month. This record-breaking monthly rally has surpassed the gains seen during the 1990 Gulf War, pushing prices above $116 a barrel on Monday.
In addition to the energy sector, gold prices rose due to a weaker dollar and value-seeking by investors. On the domestic front, market participants have adjusted their expectations for monetary policy. The Bank of Canada is now expected to deliver three interest rate hikes this year, a significant shift from earlier projections that suggested rates would remain steady.
