BoC rate decision due Wednesday
Traders see a 71.5% chance of 25 bps hike
Dec 06 (Reuters) - Futures for Canada's resources-heavy main stock index edged up on Tuesday as gold prices rose, while investors await the Bank of Canada's interest rate decision.
The S&P/TSX index futures were up 0.1% at 6:55 a.m. ET, while their U.S. peers were subdued.
The benchmark Canadian index posted its biggest single-day percentage drop in four weeks in the previous session, dragged down by the energy sector that tracked lower oil prices.
Gold prices steadied on Tuesday after shedding more than 1% in the last session, helped by a weaker dollar.
Commodity prices have a major impact on Toronto stocks, as materials and energy companies combined have a near 31% weight on the main index. The TSX, like its U.S. counterparts has rallied from October lows on hopes that the Federal Reserve and major central banks would dial down their aggressive approach on interest rates. However, recent data from the United States, including strong services activity data on Monday, has stoked worries that the Fed could keep raising rates aggressively and for longer. The BoC will be one of the first major central banks to announce the interest rate decision in December, with announcements from the Fed and the European Central Bank to follow next week. Traders are pricing in a 71.5% chance of a dialed-down 25 basis-point hike from the BoC on Wednesday, though according to a Reuters poll, the central bank will raise its key interest rate by another 50 bps.
In individual company news, Cenovus Energy Inc forecast higher capital expenditure for 2023, as it looks to boost production in response to higher crude prices amid a supply crunch caused by sanctions on Russia. (Reporting by Shashwat Chauhan in Bengaluru Editing by Vinay Dwivedi)