12:08 PM EDT, 06/05/2024 (MT Newswires) -- The TSX is up 132 points with most sectors higher after the Bank of Canada cut its key benchmark interest rate by 25 basis points to 4.75% and it left the door open for further rate cuts if inflation eases further in coming weeks and months

For RBC, the bottom line is that the rate cut today from the Bank of Canada marks the "first step" of an easing cycle where interest rates are lowered back towards "normal" levels, and "spells good news" for Canadian households that have been contending with elevated borrowing costs. To be sure, it noted, interest rates themselves are still high -- and will still be at levels the BoC views as 'restrictive' by the end of this year even if RBC's expected 100 bps worth of cuts materialize.

Still, RBC said, the move itself signifies confidence among policymakers that the most likely path for future inflation in Canada is down. It noted the BoC will get two additional monthly inflation and labour market reports, as well as the second quarter business and consumer surveys before the next scheduled policy decision in July. "Those should all offer more clues on a few key pressures points that the BoC highlighted including housing, wage growth and inflation itself. Our own base case assumes another 25 basis point cut in July," it added.

The biggest gainers so far are miners (+1.9%) and info tech (+1.5%), followed by utilities, up 1%.

Financials and telecoms are the sole decliners, down 0.05% and 0.3%, respectively.