FX.co ★ TSX Futures Decline on Higher Global Yields

Futures tracking Canadian equities slipped on Tuesday as global bond yields climbed. Renewed conflict in the Middle East pushed oil prices higher, prompting markets to reassess the outlook for further interest rate hikes by major central banks. In a speech at Jackson Hole on Friday, U.S. Federal Reserve Chair Warsh reaffirmed the Fed’s commitment to taming inflation, bolstering expectations for a rate increase this month. The Bank of Canada, by contrast, is widely expected to hold rates steady on Wednesday, even as Canada’s 10-year government bond yield touched a near two-week high. The rising yield environment weighed on financials and other rate-sensitive sectors and dragged on gold prices, putting pressure on mining stocks. Recent gains in gold miners have been the primary driver of the TSX’s rise over the past month.