04:24 PM EDT, 10/31/2025 (MT Newswires) -- The Toronto Stock Exchange rose for a second-straight day Friday as CIBC's Avery Shenfeld guessed the Bank of Canada may move next week to sound "a bit less definitive about whether they are done or not" with rate cuts, while he also played down fears around rising federal deficits provided the government sees a "credible path" to lowering them ahead.

The resources-heavy S&P/TSX Composite Index closed up 81.76 points to 30,260.74. Most sectors were higher, led by Health Care up near 3% and Info Tech up 1%. In contrast, Telecom was the biggest decliner, but only down 0.25%.

While the Bank of Canada, as expected, lowered its key benchmark interest rate by 25 basis points to 2.25% on Wednesday, a second-straight monthly cut, the general consensus among most market watchers was that the central bank in commentary around the decision indicated it was now on hold.

But Shenfeld, Chief Economist at CIBC Capital Markets, believes the planned appearance of BoC Governor, Tiff Macklem, for a 'Fireside Chat' at the The Logic Summit in Toronto on Monday to talk about the state of Canada's economy may be worth keeping an eye on. The Governor's remarks will not be published, but audio and video webcasts will be available, according to the BoC's website.

Shenfeld said his guess is that Macklem "might want to try to undo some of the hawkish market reaction to their rate announcement, by sounding a bit less definitive about whether they are done or not". Even if a steady 2.25% overnight rate is the most likely outcome, the central bank can't be so sure of that when the whole macro outlook is still this uncertain, he added.

A day later, Tuesday, the federal government will deliver its long awaited and overdue fiscal budget amid concerns around rising deficits as Canada is stuck in an ongoing trade battle with the United States, its largest trading partner. Shenfeld said a deficit in the $80 billion to $90 billion range for fiscal 2025-2026 "shouldn't create any major waves in the bond market, provided the budget shows a credible path to lower deficits ahead".

Elsewhere, Derek Holt, Head of Capital Markets Economics at Scotiabank, in an early version of his regular 'The Global Week Ahead' column said the federal government might not have to go as high as expected with its deficits.

Holt said: "The cloak of secrecy over a budget that Ottawa initially did not wish to present this year will finally be lifted on Tuesday. A hot mess of numbers, some firm, some fiction, and sloganeering lies in store as Canada seeks to address two challenges: a moribund pre-Trump economy and the new realities that U.S. isolationism present. I admire PM Carney's understanding of the forces at work in the global economy and generally agree, but his chosen policy path may not be the only option and perhaps not the best."

Adding to that, Holt cited a "parallel challenge" in that the U.S Supreme Court commences its review of the International Emergency Economic Powers Act (IEEPA) tariffs on Wednesday. Holt said: "There are other options for applying tariffs, but eventually striking down use of the IEEPA would be a major blow to the Trump administration and, by corollary, raise the risk of overdoing it on fiscal stimulus in Canada."

Of commodities, gold prices had fallen by late afternoon on Friday even as the dollar rose to a three-month high on a calming in international trade tensions following a one-year trade agreement between China and the United States. Gold for December delivery was last seen down US$6.00 to US$4,009.90 per ounce.

But West Texas Intermediate crude oil closed higher ahead of a weekend OPEC+ meeting likely to end with another production hike into an already over-supplied market. WTI crude for December delivery closed up $0.41 to settle at $60.98 per barrel, while December Brent crude was last seen up $0.04 to $65.04.