Canada’s main stock index fell on Monday, as investors took a breather after a week of record-setting gains and looked ahead to a possible interest rate cut by the Bank of Canada later this month.
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE was down 0.5% at 28,894.92 points, snapping an eight-session winning streak.
The benchmark index ended at a record peak on Friday.
Odds of a rate cut rose after data showed on Friday that Canada’s economy shed 65,500 jobs in August, and the unemployment rate climbed to 7.1%.
Money markets expect a 92% chance of a 25 basis-point interest-rate cut on September 17, according to data compiled by LSEG. 0#CADIRPR
The BoC has kept rates steady at 2.75% at its last three meetings since March.
Investors are also are expecting a rate cut that same day by the U.S. Federal Reserve after Friday’s nonfarm payrolls report confirmed the U.S. labor market was deteriorating.
“The case is stronger for a rate cut in Canada, although market expectations are greater for a rate cut in the U.S. at the September meeting,” said Brian Madden, chief investment officer at First Avenue Investment Counsel.
“Canada had two back-to-back months of job losses … The U.S. job market is slowing, but it’s in much better shape.”
Ten of the TSX’s 11 sectors edged lower on Monday, with industrial stocks .GSPTTINfalling 1.2%.
MDA Space MDA.TO fell nearly 21% after the space firm said it received a termination notice from EchoStar for its satellite constellation contract announced on August 1.
An index of material miners .GSPTTMT edged slightly higher, tracking bullion’s record rally.
Among other individual stocks, luxury parka maker Canada Goose GOOS.TO rose 7.5% after brokerage TD Cowen upgraded the stock to “buy” from “hold.”
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