(Reuters) - Futures tracking Canada's main stock index slipped on Wednesday on mounting recession worries, while investors awaited the Bank of Canada's interest rate decision later in the day.
Futures on the S&P/TSX index were down 0.1% at 6:37 a.m. ET, while their U.S. peers also slipped, a day after big U.S. banks cautioned of slowing growth next year. [.N]
The BoC is expected to hike its benchmark overnight rate to its highest level in 14 years as it seeks to tame high inflation, with the decision expected at 10 a.m. ET (1500 GMT).
In the past nine months, the central bank has cranked up borrowing costs at a historically fast pace — by 350 basis points to 3.75%.
Money markets are pricing in a 65.6% chance of a dialed-down 25-basis-point hike from the BoC, with bets of a 50-basis-point increase at 34.4%.
The TSX has recovered 9.7% from its October closing low on hopes that the Federal Reserve and other major central banks would temper their aggressive rate hike stance.
However, the rally has hit a roadblock in recent days, with the TSX closing lower for the past three consecutive sessions as investors reassess their rate hike expectations from the Fed after strong U.S. data highlighted economic strength.
Meanwhile, oil prices slipped, pressured by concerns about recession and easing fears that a Western cap on Russian oil prices would significantly curb supply while gold prices were listless against a stronger dollar. [O/R] [GOL/]
Commodity prices have a major impact on Toronto stocks, as materials and energy companies combined have a near 31% weight on the main index.
($1 = 1.3681 Canadian dollars)