Canadian stocks are firing on all cylinders this year, despite the headwinds brought by Donald Trump’s tariffs. The TSX Composite Index jumped to a record high of $29,283, up by 31% from its lowest level this year. This article highlights some of the top catalysts to watch this week.Canada inflation data The first main catalyst that will drive the TSX Composite Index will be the upcoming Canadian consumer inflation data on Tuesday.Economists expect the data to show that the headline Consumer Price Index (CPI) rose from 1.7% in July to 1.8% in August, while the core CPI remained unchanged at 2.6%.The Canadian inflation numbers are important because of their impact on the stock and bond markets. In most cases, lower rates usually lead to interest rate cuts and lower bond yields.Data shows that Canada’s bond yield has moved downwards this year. The ten-year yield has dropped to 3.18% from the year-to-date high of 3.62%, while the 30-year yield moved downwards to 3.62%, down from the year-to-date high of 3.9%.Bank of Canada interest rate decision The other notable catalyst for the TSX Composite Index is the upcoming Bank of Canada interest rate decision, which is scheduled on Wednesday.Economists expect the bank to cut interest rates because inflation has remained below the important point at 2% in the past few months.The base case is that it will lower rates from 2.75% to 2.50%, much lower the US borrowing rate of 4.50%. Analysts also expect that the central bank will cut interest rates at least one more time this year.Federal Reserve interest rate decision The TSX, like other major global indices, will react to the upcoming Federal Reserve interest rate decision.Economists expect the bank to slash interest rates by 0.25% in this meeting. It will bring the official borrowing rate to between 4.00% and 4.25%.In theory, Federal Reserve interest rate cuts would trigger more risk-taking among investors, which will lead to higher stock price values. However, the upcoming rate has been priced in, which may push stocks downwards  A rate cut would also boost gold prices, a move that would impact the TSX Index because many companies in the gold mining industry are listed on it.TSX Index is highly overbought TSX Composite chart | Source: TradingViewThe other main catalyst for the TSX Composite is its technicals, which point to a retreat this week. The chart above shows the Relative Strength Index (RSI) has jumped to 77, meaning that it is highly overbought.It also remains much higher than the 50-day and 100-day Exponential Moving Averages (EMA). This means that it could go through mean reversion in the coming weeks. If this happens, the next key support level to watch will be at $28,000.The post Top catalysts for Canada’s TSX Composite Index appeared first on InvezzCanadian stocks are firing on all cylinders this year, despite the headwinds brought by Donald Trump’s tariffs. The TSX Composite Index jumped to a record high of $29,283, up by 31% from its lowest level this year. This article highlights some of the top catalysts to watch this week.Canada inflation data The first main catalyst that will drive the TSX Composite Index will be the upcoming Canadian consumer inflation data on Tuesday.Economists expect the data to show that the headline Consumer Price Index (CPI) rose from 1.7% in July to 1.8% in August, while the core CPI remained unchanged at 2.6%.The Canadian inflation numbers are important because of their impact on the stock and bond markets. In most cases, lower rates usually lead to interest rate cuts and lower bond yields.Data shows that Canada’s bond yield has moved downwards this year. The ten-year yield has dropped to 3.18% from the year-to-date high of 3.62%, while the 30-year yield moved downwards to 3.62%, down from the year-to-date high of 3.9%.Bank of Canada interest rate decision The other notable catalyst for the TSX Composite Index is the upcoming Bank of Canada interest rate decision, which is scheduled on Wednesday.Economists expect the bank to cut interest rates because inflation has remained below the important point at 2% in the past few months.The base case is that it will lower rates from 2.75% to 2.50%, much lower the US borrowing rate of 4.50%. Analysts also expect that the central bank will cut interest rates at least one more time this year.Federal Reserve interest rate decision The TSX, like other major global indices, will react to the upcoming Federal Reserve interest rate decision.Economists expect the bank to slash interest rates by 0.25% in this meeting. It will bring the official borrowing rate to between 4.00% and 4.25%.In theory, Federal Reserve interest rate cuts would trigger more risk-taking among investors, which will lead to higher stock price values. However, the upcoming rate has been priced in, which may push stocks downwards  A rate cut would also boost gold prices, a move that would impact the TSX Index because many companies in the gold mining industry are listed on it.TSX Index is highly overbought TSX Composite chart | Source: TradingViewThe other main catalyst for the TSX Composite is its technicals, which point to a retreat this week. The chart above shows the Relative Strength Index (RSI) has jumped to 77, meaning that it is highly overbought.It also remains much higher than the 50-day and 100-day Exponential Moving Averages (EMA). This means that it could go through mean reversion in the coming weeks. If this happens, the next key support level to watch will be at $28,000.The post Top catalysts for Canada’s TSX Composite Index appeared first on Invezz

Top catalysts for Canada’s TSX Composite Index

Brazil and Canada discuss reviving Mercosur free trade talks ahead of an August 25 visit.

Canadian stocks are firing on all cylinders this year, despite the headwinds brought by Donald Trump’s tariffs. The TSX Composite Index jumped to a record high of $29,283, up by 31% from its lowest level this year. This article highlights some of the top catalysts to watch this week.

Canada inflation data 

The first main catalyst that will drive the TSX Composite Index will be the upcoming Canadian consumer inflation data on Tuesday.

Economists expect the data to show that the headline Consumer Price Index (CPI) rose from 1.7% in July to 1.8% in August, while the core CPI remained unchanged at 2.6%.

The Canadian inflation numbers are important because of their impact on the stock and bond markets. In most cases, lower rates usually lead to interest rate cuts and lower bond yields.

Data shows that Canada’s bond yield has moved downwards this year. The ten-year yield has dropped to 3.18% from the year-to-date high of 3.62%, while the 30-year yield moved downwards to 3.62%, down from the year-to-date high of 3.9%.

Bank of Canada interest rate decision 

The other notable catalyst for the TSX Composite Index is the upcoming Bank of Canada interest rate decision, which is scheduled on Wednesday.

Economists expect the bank to cut interest rates because inflation has remained below the important point at 2% in the past few months.

The base case is that it will lower rates from 2.75% to 2.50%, much lower the US borrowing rate of 4.50%. Analysts also expect that the central bank will cut interest rates at least one more time this year.

Federal Reserve interest rate decision 

The TSX, like other major global indices, will react to the upcoming Federal Reserve interest rate decision.

Economists expect the bank to slash interest rates by 0.25% in this meeting. It will bring the official borrowing rate to between 4.00% and 4.25%.

In theory, Federal Reserve interest rate cuts would trigger more risk-taking among investors, which will lead to higher stock price values. However, the upcoming rate has been priced in, which may push stocks downwards  

A rate cut would also boost gold prices, a move that would impact the TSX Index because many companies in the gold mining industry are listed on it.

TSX Index is highly overbought 

TSX Composite chart | Source: TradingView

The other main catalyst for the TSX Composite is its technicals, which point to a retreat this week. The chart above shows the Relative Strength Index (RSI) has jumped to 77, meaning that it is highly overbought.

It also remains much higher than the 50-day and 100-day Exponential Moving Averages (EMA). This means that it could go through mean reversion in the coming weeks. If this happens, the next key support level to watch will be at $28,000.

The post Top catalysts for Canada’s TSX Composite Index appeared first on Invezz

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