Canada: TSX Pressured by Hawkish BoC Outlook.

The S&P/TSX Composite fell about 0.3% to below the 30,350 mark on Wednesday as markets digested the Bank of Canada’s expected 25bp rate reduction and firmer forward guidance. The BoC cut its policy rate by 25bp to 2.25% and signalled the move likely marks the endpoint of the easing cylce. The decision arrived against weak growth after Q2 GDP contracted 1.6% and a softer labour market despite a one-off 60,000 payroll boost that left unemployment near 7.1%. Sticky inflation with headline CPI at 2.4% and the Trimmed measure around 3.1% tempered hopes for further cuts, so markets treated the reduction as priced in and pushed yields higher after the Bank framed the move as data dependent. Rate sensitive tech and financials led the decline. Constellation Software fell more than 3% while major lenders RBC, TD, BMO and Scotiabank each lost over 0.5%.