04:18 PM EDT, 03/19/2024 (MT Newswires) -- Canada's main stock market, the resources heavy Toronto Stock Exchange, overcame mixed commodity prices to close a modest 23 points higher on Tuesday, buoyed by interest in Gildan Activewear Inc. ( GIL ) and the prospect of the Bank of Canada starting to cut interest rates in June. While the TSX did lose about 50 points over the final hour of Tuesday's session, it has risen 4.3% in calendar 2024 to date and stands about 220 points off record high levels.

The TSX may already be set for a further boost Wednesday after trading in Gildan shares was halted mid-afternoon today, and that could resume tomorrow. They had last traded up about 10% in both Canada and in the United States. This came about as The Globe and Mail newspaper reported that Gildan's board has put the T-shirt manufacturer up for sale and private equity funds are circling, "escalating a three-month battle for control of one of the country's largest consumer product companies".

Over the past four weeks, Montreal-based Gildan received a takeover approach from a potential buyer and responded by giving investment banks RBC Capital Markets and Goldman Sachs Group Inc. a mandate to look for additional bidders, according to two sources, the report said. The Globe and Mail is not naming the sources because they are not permitted to speak publicly on the matter. A spokesperson confirmed Gildan is examining the takeover approach, the report added.

Or maybe the TSX will get a further boost tomorrow on interest rate talk here in Canada. RBC said there were "several positive developments" in today's February CPI report that reinforces its view of a June start date for Bank of Canada easing. RBC added its "longstanding opinion of latter/less instead of earlier/more still holds", so July is more likely than April.

RBC reminded that its forecast has remained steady for a June start date and 200bp of cuts in the cycle since last July. It said its recent forecast update "finessed the sequencing" -- 100bp in 2024 (same as before) with 25bp at each meeting in June, July, September, and October, followed by a short pause (Dec/Jan), and 100bp in 2025 with 25bp at consecutive meetings starting in March. "The April meeting still seems too early for few reasons and is likely to be used to express greater confidence in the inflation outlook and a set up for a June cut," the bank added.

Still, Derek Holt, Vice-President & Head of Capital Markets Economics at Scotiabank, cautioned the BoC will probably require a lot more evidence of softening. He said the biggest risk to Canadian rates is a dovish policy error. "So cut?," asked Holt, "on the back of two soft months of inflation data? I know I wouldn't."

Holt added: "The biggest risk in my opinion is nevertheless a central bank that has fouled up throughout the whole pandemic fouling up once again under pressure to ease prematurely. It took way to long to begin tightening while denying all of the inflation evidence. That made it have to tighten more than it would have had it acted faster. It went on pause and contributed to renewed pressures only to have to come back with more hikes. To ease too soon would be the final straw. It would be a high stakes gamble that could easily backfire and add another black mark against [Governor] Macklem's leadership in the role."

Of commodities today, gold closed lower with the dollar strengthening as the two-day meeting of the Federal Reserve's policy committee began. Gold for June delivery closed down $4.70 to settle at US$2,181.20 per ounce.

But West Texas Intermediate crude oil rose to another five-month high on optimism over Chinese demand amid continuing OPEC+ supply cuts. WTI crude for April delivery closed up $0.75 to settle at US$83.47 per barrel, the highest since late October, while May Brent crude, the global benchmark, closed up $0.49 to US$87.38 per barrel.