Futures for Canada’s main resource-heavy stock index were muted on Thursday as the Bank of Canada’s surprise interest rate hike continued to dent investor sentiment, while gains in oil and precious metal prices provided some relief.
June futures on the S&P/TSX index were little changed after the benchmark index closed 0.4% lower in the previous session.
The Bank of Canada on Wednesday hiked its key rate to a 22-year high of 4.75%, and markets and analysts immediately forecast another increase next month to ratchet down an overheating economy and stubbornly high inflation.
“The 25 bps hike to 4.75% by the BoC was wrapped in a hawkish statement … the choice of words describes an inflation backdrop that could apply to other developed economies,” Societe Generale analysts said in a note.
Citigroup expects the central bank to deliver a 25-basis-point hike in July and sees a high chance of rates topping 5%.