Futures for Canada's main stock index edged higher on Monday, aided by gains in the prices of safe-haven assets like bullion, as investors returned to markets plagued by uncertainty in the global financial sector.
The TSX declined 151.29 points to end Friday at 19,387.72, for a loss on the week of 387 points, or 1.96%
March futures on the S&P/TSX index crept up 0.3% Monday morning, first official day of spring.
Global investor sentiment was jittery following an emergency weekend rescue of banking heavyweight Credit Suisse that failed to calm investors and raised angst about the stability of the global financial system.
The Canadian dollar inched 0.06 cents to 72.97 cents U.S.
Among stock news, Credit Suisse upgraded its rating on Brookfield Corp to "outperform" from "neutral."
Meanwhile, brokerage ATB highlighted considerable liquidity, dilution and going-concern risks for pot stock Hexo Corp.
ON BAYSTREET
The TSX Venture Exchange inched up 2.88 points Friday to 605.08, for a loss on the week of seven points, or 1.1%.
ON WALLSTREET
U.S. stock futures stooped slightly Monday as investors assessed the state of the global banking system after the Swiss government engineered a forced takeover of Credit Suisse by UBS, marking the latest effort by governments around the world to stifle a crisis threatening the banking sector.
Futures for the Dow Jones Industrials dipped 37 points, or 0.2%, early Monday to 32,034.
Futures for the S&P 500 slid 5.25 points, or 0.1%, to 3,923.75.
Futures for the NASDAQ Composite fell 18 points, or 0.1%, to 12,626.75.
Regional banks were still under pressure to shore up their deposit bases in the wake of the collapse of Silicon Valley Bank earlier this month.
Wall Street expects more actions may be needed to restore confidence in the banking system after U.S. regulators backstopped SVB’s uninsured deposits and offered new funding for troubled banks one week ago.
The instability in the financial sector over the past two weeks raised the stakes for the Federal Reserve’s interest rate decision on Wednesday. As of Monday morning, there is about a 57% chance of a quarter-point increase by the Fed, according to CME Group data using fed funds futures contracts as a guide. The other 38% is in the no-hike camp, anticipating that Chairman Jerome Powell may start to ease his aggressive tightening campaign that began in March 2022, in the face of the emerging financial contagion.
UBS agreed to buy Credit Suisse for three billion Swiss francs, or $3.2 billion, with the combined bank to have $5 trillion in assets. Credit Suisse shares were down 21% last week. Shortly after UBS announced its takeover deal, the Fed announced it had joined with other central banks in a joint liquidity operation. The group of central banks — including the Bank of Canada, Bank of England, Bank of Japan, European Central Bank and Swiss National Bank — agreed to increase the frequency of their U.S. dollar swap line arrangements from weekly to daily.
But traders may be eager for more to be done by regulators to stem the slide in regional banks. First Republic shares fell 17% in the premarket Monday after losing 72% last week. The declines come even after a group of banks Thursday pledged to deposit $30 billion for at least 120 days in the embattled San Francisco institution.
In Japan, the Nikkei 225 index was lower by 1.4% Friday, while in Hong Kong, the Hang Seng ditched 2.7%.
Oil prices sagged 90 cents to $65.84 U.S. a barrel.
Gold prices jumped $13.80 to $1,987.30 U.S. an ounce.
