Sept 16 (Reuters) - Futures tied to Canada's main stock

index edged higher on Monday ahead of the U.S. Federal Reserve's

monetary policy decision later in the week, with investors

anticipating a steeper interest rate cut.

Futures on the S&P/TSX index were up 0.1% at 6:01

a.m. ET (10:01 GMT).

Odds of a hefty 50-basis points cut in key interest rate at

the end of the Fed's two-day meeting on Wednesday have risen to

59% from 30% last week, according to CME's FedWatch tool.

Meanwhile, Bank of Canada Governor Tiff Macklem has opened

the door to stepping up the pace of interest rate cuts, the

Financial Times reported on Sunday. He told the newspaper that

rate-setters were concerned about Canada's labor market and the

possibility of lower oil prices hitting the economy.

The materials sector was set to benefit as gold prices

touched record highs due to a softer dollar and rate-cut

expectations. On the flip side, copper prices nursed declines.

The composite index hit its second consecutive

record high on Friday as investors perked up on the possibility

of the rate cut.

Washington is Canada's biggest trading partner and a larger

U.S. rate cut could also benefit the country's resource-heavy

stock market.

Canada's energy sector was set to remain in focus as oil

prices jumped amid expectations of the rate cut.

On the data front, markets will monitor manufacturing sales

numbers expected at 8:30 a.m. ET.

Focus will also be on key consumer prices data, as well as

producer prices and retail sales numbers due later in the week.

In corporate news, Air Canada ( ACDVF ) on Sunday reached a

tentative last-minute deal with its pilots' union over a new

four-year collective agreement, ending a stand-off over pay and

benefits and averting a near-term strike or lockout.

COMMODITIES

Gold: $2,586.13; +0.37%

US crude: $69.15; +0.7%

Brent crude: $72; +0.5%

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($1 = 1.3579 Canadian dollars)