12:09 PM EDT, 06/10/2025 (MT Newswires) -- The Toronto Stock Exchange is up 16 points with energy (+2%) and telecoms (+1.2%), leading gains, followed by utilities (+0.4%).

Miners, down 0.5%, is the biggest decliner.

BMO Economics said in its Tuesday morning note that with very little on the economic calendar until tomorrow's U.S. inflation report, and the world's two largest economies (the United States and China) meeting on trade this week, markets seem to be in wait-and-see mode.

According to one Macquarie strategist, a US-China trade deal would be risk-reducing, but a USD rally would be short lived. Thierry Wizman, Global FX & Rates Strategist at Macquarie, said the sticking point could end up being the U.S. unwillingness to include the sophisticated chips made by Nvidia in the deal, as these are used for processing power in AI, where both countries are now battling for supremacy.

"Should the talks actually produce a substantial deal, traders would deem that to be very good news, and risk reducing. But we would expect that the USD would rally, in keeping with the recent pattern of seeing the USD act as a risk currency. However, we would also expect that rally to be short-lived," Wizman added.

On the home front, BMO noted yesterday that Prime Minister Mark Carney said Canada would meet NATO's target of defence spending at 2% of GDP in the current fiscal year (ends in March) -- about five years ahead of his election promise, and well above the roughly 1.5% spent in calendar year 2024 (NATO estimate).

Carney said defence spending would reach $62.7 billion in FY25-26, with funds to the Department of National Defence jumping by $9.3 billion and other departments splitting another roughly $14 billion. The plan includes a pay bump for the Canadian Armed Forces and repairs and upgrades to maritime and aerospace infrastructure and equipment. But, BMO said, some of the measures (e.g. moving the Coast Guard from Fisheries and Oceans to National Defence) are effectively just shuffling funds around, so "the actual price tag will be a bit lighter than it seems at first glace". Still, BMO added, this is a "hefty" jump in spending that will likely blow previous deficit projections out of the water for this year.