04:27 PM EDT, 09/16/2025 (MT Newswires) -- The Toronto Stock Exchange closed down from a record high Tuesday as market watchers await a Bank of Canada interest-rate decision tomorrow, with RBC saying it will be a "closer call than the market expects", and as Teck Resources closed lower after a federal minister hinted a proposed deal with Anglo American may not get the green light.

With profit taking balancing any positivity around higher commodity prices, the resources-heavy S&P/TSX Composite Index closed down 115.79 points or 0.4% to 29,315.23, with most sectors lower. Health Care was down 2.8% and Base Metals down near 1%. In contrast, Energy was up 2.5% and the Battery Metals Index up 2%.

On commodities, gold continued its record run up midafternoon on Tuesday as the Federal Reserve's policy committee begins a two-day meeting that is expected to end with the central bank's first cut to interest rates this year. Gold for December delivery was up $6.60 to US$3,725.60 per ounce, rising off Monday's record close.

Also, West Texas Intermediate oil closed at a two-week high on weakening supply from Russia as Ukrainian attacks on the country's oil infrastructure cut into physical supply while China continues buying to build its strategic reserves. WTI crude oil for October delivery closed up $1.22 to settle at $64.52 per barrel, the highest since Sept.2. November Brent crude was last seen up $1.20 to $68.64.

In individual stock news, Industry Minister Melanie Joly said the Canadian government would want to see longer-term commitments to this country if Teck Resources (TECK-A.TO, TECK-B.TO) is allowed to merge with U.K.-based miner Anglo American, The Canadian Press reported. "There have been conversations with the companies, and clearly we wanted to make sure that there would be a net benefit to Canada. But I think right now that it's not enough," Joly said as she headed into a cabinet meeting Tuesday.

The report noted while Joly said the short term matters, she added, "we need to think about longer term and how can we make sure that ultimately we create jobs, but we have a strong headquarters, not only now but also for the next decade." It cited Joly saying further conversations are needed and she plans to speak to the chief executives of both companies next week.

Teck's Class B shares closed down $2.48 to $55.31.

In terms of two outstanding Canadian economic questions, one was answered today with Finance Minister Francois-Philippe Champagne saying the governing Liberals will present a delayed federal budget, the first under new Prime Minister, Mark Carney, on Nov. 4. The other big question, related to whether or not the Bank of Canada's Governing Council members feel the time is right to re-start with rate cuts, will be answered tomorrow.

According to RBC Capital Markets, the market is doing a "full court press" for a BoC cut tomorrow, at near 23bp priced, but it said the decision is probably more finely balanced within the BoC's Governing Council, and in the minds of those at RBC. The "easy" answer, RBC added, is a negative Q2 GDP print, two months of rising unemployment rate and a neutral CPI print today are sufficient conditions to re-start a easing cycle. But it noted the Governing Council was somewhat divided in the context of a hold decision in July, with the Summary of Deliberations showing some Council members seeing more to do, others seeing the cutting cycle as over.

RBC noted "under-appreciated reasons why staying on the sidelines now is prudent". It said under the surface the GDP and employment data was "significantly less alarming" than the headlines, noting final domestic demand rebounded to near 3.5% in Q2 and youth and self-employed job losses the last two months are "not particularly concerning". RBC Economics recently highlighted weakness in exports and employment year to date is mostly contained to high tariff-exposed sectors. "It could be a high hurdle for the BoC to rely on recent trade-policy distorted data to make the leap into re-starting the easing cycle, RBC added.

"Importantly," RBC said, "fiscal policy is better suited to manage isolated economic problems. Signs from fiscal authorities suggest next month's Federal budget will be on the expansionary side, with any "austerity" on program spending likely to be more than offset by increased spending elsewhere (e.g. infrastructure, defence). The fiscal side can provide a needed boost to overall sentiment and target measures to trade-impacted sectors. Provincial fiscal updates have leaned to larger deficits than earlier budgets.

"Is there," RBC added, "enough urgency to move before incorporating the new information from the Federal budget?"

RBC noted upside inflation risks have diminished, with many retaliatory tariffs removed, and underlying core trends at three months annualized are moving lower, but it also noted underlying inflation still seems stuck around the 2.5% level, which is right where the BoC assessed it at the last Summary of Deliberations. "Cutting into an elevated/sticky inflation backdrop requires high confidence that the future growth outlook will be soft," RBC said.

Other considerations, RBC noted, are the "domestic vibes aren't particularly worrisome" as sentiment indicators have improved from the low points earlier in the year, and according to RBC Economics Q3 is showing early signs of recovery. It also noted potential GDP is falling and is likely 0% to 1% in 2025, with population growth headed to zero. "Not much residual growth in the economy, never mind a boost from fiscal stimulus, is necessary for the economy to grow above trend, RBC added.

Lastly, RBC said, key metrics have all come in line with the BoC's July forecasts on Q2 GDP, headline and core inflation, when the central bank decided to hold rates. "To warrant a cut and provide a bridge until fiscal helps out, the BoC will need to have confidence that there is "urgency" on the growth side (i.e. below trend growth will persist and broaden from trade related distortions), "it added.

Meanwhile, CIBC in an FICC Strategy note with pre-BoC trading thoughts said the central bank is "universally" expected to restart the easing cycle tomorrow, lowering the policy interest rate by 0.25 basis points to 2.50%. But CIBC expects the BoC to remain within the 'flooridor' system, maintaining the deposit rate at 5.0bps below the policy rate and the Bank rate at 25.0bps above. "The reason for the ease reflects increased evidence that a weaker economy is putting downward pressure on inflation, while the upward price pressures from trade disruptions look very contained," it added.

Elsewhere, David Doyle, head of economics at Macquarie Group, said today's CPI data "solidifies" a 25 bps cut at tomorrow's meeting. Macquarie continues to see a total of 50 bps in cuts. Its base case is for the second cut to occur in October. It added risks to this view are for greater easing with a third 25 bps cut also possible in December or January.