04:21 PM EDT, 04/11/2024 (MT Newswires) -- The Toronto Stock Exchange's S&P/TSX Composite Index fell for a second-straight session on Thursday, dropping 89.02 points to close at 22,110.11 amid some investor concerns over what a delay in starting interest-rate cuts in the United States will mean for the rates cycle in Canada,.

The sole gainer on the day was the Information Technology sector, up 0.494%, while biggest decliner was Energy, down 1.914%.

West Texas Intermediate (WTI) crude oil closed lower on Thursday, dropping off a day-prior rise that came on heightened geopolitical worries, as US inventories remain high and a US inflation measure rose more than expected last month, again lowering hopes for speedy rate cuts from the Federal Reserve.

WTI crude oil for May delivery closed down US$1.19 to settle at US$85.02 per barrel, while June Brent crude, the global benchmark, closed down US$0.74 to US$89.74.

Gold prices rose on Thursday as market watchers took in the latest U.S. inflation data. Gold for June delivery was last seen up US$42.70 to a record US$2,391.10 per ounce.

Many market watchers believe the Bank of Canada is set to cut rates in June, but others are not certain it will stick with that timing if the Federal Reserve delays its own rate cuts until later in the year.

Thierry Wizman, Global FX & Rates Strategist at Macquarie, said with the U.S. experiencing three consecutively high U.S. CPI inflation reports, "a certain logic dictates that it will take three months of low inflation data to offset this for a Fed wedded to data-dependency."

And, Wizman added, that may not happen smoothly anyway, given "last mile" impediments.

"With the Fed apt to cut its policy rate alongside a SEP release, we may have to wait until December for that first policy-rate cut," he added.

Royce Mendes at Desjardins in a "Bank of Canada Post Mortem" noted his June rate-cut prediction sees policy diverging between the BoC and the Fed now that U.S central bankers are expected to wait longer to ease.

Mendes noted the target for the overnight rate in Canada is currently set 37.5bps below the target for the Fed funds rate in the U.S. According to him, one or even two rate cuts in Canada can occur before the Fed begins easing without pushing the spread to uncomfortable levels.

Mendes noted that the BoC's policy rate has been 100 bps or more below the Fed's target policy rate 11% of the time since 1996. While the widest divergence registered was 250bps, Desjardins forecasts that the spread will reach a maximum of 112.5 bps during the upcoming easing cycle.

Scotiabank in its morning note, said it is watching out for what the Federal Budget next week may contain as the Federal Government releases its contents in "dribs and drabs". Pay particularly keen attention to anything the government may guide on taxes and mortgages, it added.

Meanwhile, David Doyle, head of economics at Macquarie, noted yesterday's US CPI data showed core CPI remained firm in March, rising +0.36% MoM. Its three-month average continues to show a rising trend. Macquarie's FOMC view shifts more hawkish on the data. It now only expects one 25 bps cut in 2024 (prev. 50 bps). Its baseline is for this to occur in December.

In 2025, Macquarie continues to expect a further 50 bps in cuts. As a result, its end-25 fed funds rate forecast rises to 4.63% (prev. 4.38%).