12:08 PM EDT, 07/28/2025 (MT Newswires) -- The Toronto Stock Exchange is down 55 points at midday with most sectors lower. The biggest decliners are miners and telecoms, both down 0.9%.

Energy and healthcare are the biggest gainers, up 2% and 0.1%, respectively.

BMO Economics in its morning note said equity markets rose last week, as a few more trade deals landed with tariffs that investors were deeming to be "manageable", although Canada was "not there yet". The EU and the U.S. struck a trade deal over the weekend. The TSX rose 0.7% to finish at another record high, with a pullback in technology partly offsetting solid gains in materials and communication services.

All eyes for now are back on the Bank of Canada, which makes its policy announcement, along with an updated Monetary Policy Report, on Wednesday. BMO said the BoC will likely leave interest rates unchanged for a third straight meeting. But, a run of below-potential growth and job-market slack still argues for further modest easing into the end of 2025, it added.

BMO also added that we'll get the May GDP report on Thursday, and it is looking for a small 0.1% decline, with a close on the early June reading. All told, while the economy is evolving closer to the Bank's 'less bad' scenario, below-potential growth is still widening the output gap, BMO said.

According to Rosenberg Research, there can be little doubt Canada's Prime Minister Mark Carney will soon be forced back to the negotiating table with the U.S. to avoid being left out in the cold. It noted Mexico also has yet to ink a deal ahead of the August 1st reciprocal tariff deadline.

Rosenberg Research said it now looks like the effective tariff rate will end up settling in as low as 16% or as high as 20%. Either way, far above the 2.5% levy at the start of the year and the highest since the 1930s, it added.