12:09 PM EDT, 04/02/2024 (MT Newswires) -- The TSX is down 180 points at midday, hovering just above the 22,000 mark. The sole gainers are miners and energy, up 0.9% and 0.7%, respectively.

The telecoms sector is the biggest decliner, down 3.3%, followed by info tech, which is 1.5% lower.

Oil rose to the highest in more than five months early on Tuesday as supply remains tight amid signs of rising demand and geopolitical turmoil.

Gold rose for a sixth-straight session, pushing to a fresh record as the dollar dipped and investors continue to move to the precious metal ahead of expected interest-rate cuts coming from central banks in the United States and elsewhere.

But natural gas price weakened as long-term forecasts warm, cutting demand for the fuel during the spring shoulder season.

Derek Holt, Vice-President & Head of Capital Markets Economics at Scotiabank, in his 'Daily Points' note had further thoughts on yesterday's Bank of Canada surveys of business and consumer expectations. Holt noted that Governor Macklem has consistently said that expectations and price setting behaviour are on his watch list of key things to monitor. "He probably didn't like what he saw".

On consumers, Holt noted the biggest change was to long-term inflation expectations. Consumers signalled they expect inflation to be 3.1% five years out which is up by half a percentage point since the last quarterly survey. Holt said: "We all know that nobody can forecast where inflation will be five years from now, but the signal is that consumers don't believe in the BoC's 2% inflation target. That's evident in wage setting behaviour within the collective bargaining process."

As for other horizons, Holt noted consumers' expectations for inflation over the coming year held unchanged at 4.9% and 2-years out moved marginally lower to 3.8% from 3.9%. Across all horizons, he said, consumers just don't believe that the BoC will achieve 2%.

Holt said "it's a little better in terms of what businesses expect". Businesses think inflation will be at 3.1% over the next year which is down from 3.5% in the prior survey. They also edged 2-year expectations two-tenths lower to 2.5% and 5-year expectations down by one-tenth to 2.4%. Holt noted these are all still in the upper half of the BoC's 1-3% inflation target range. Businesses also reduced how much upside they think will unfold as the share of businesses who think inflation over the next two years will average above 3% fell to 40% from 54% and instead moved up the share of businesses in the 2-3% camp from 39% to 54%. The share in the 1-2% range "remained inconsequential" at 3%. Also, Holt noted that the share of businesses planning more frequent than normal and bigger than normal price increases fell for a third straight quarter.

According to Holt, the business survey also edged up expectations for sales growth over the next year, raised their intentions to invest in machinery and equipment, signalled more hiring than in the last survey, signalled a little more difficulty meeting an unexpected increase in demand due to capacity pressures with the highest reading on this count since Q1 of last year, fewer labour shortages but slightly more intensity of those shortages, and slower wage growth than in the past year albeit still at about double the BoC's inflation target. "That last measure is garbage; businesses have been saying one thing on wages while doing the opposite in raising them," Holt said.