04:31 PM EDT, 10/17/2025 (MT Newswires) -- (Adding more RBC commentary in the sixth paragraph)

The Toronto Stock Exchange closed down for a second straight day Friday, taking total losses for the two day period to near 530 points, on profit taking after a series of record closes in recent weeks and months, and investor positioning ahead of a big week ahead for economic data that will determine whether or not the Bank of Canada cuts its benchmark interest rate again later this month.

The S&P/TSX Composite Index closed down 350.32 points, or 1.15%, to 30,108.48, adding to the 178.32 points lost Thursday. Among sectors, most were lower, led by Base Metals down more than 3% and the Battery Metals Index down 1.4%. Telecom did gain near 1%, while Industrials edged up 0.2%.

Ahead of next week's busy economic-data calendar, Bank of Canada Governor Tiff Macklem said the bank will have to be "humble" in its return to formal economic forecasting as trade uncertainty continues to swirl, The Canadian Press reported Friday. It noted the BoC intends to publish a forecast for the economy at its upcoming interest rate decision on Oct. 29, something the central bank hasn't done since early 2025 as U.S. tariffs clouded the economic horizon.

The report noted Macklem is in Washington, D.C. this week for the International Monetary Fund's annual meetings with the heads of other central banks and financial policy makers. He told reporters on a call from the sidelines of the meetings that uncertainty around the U.S. tariff campaign has decreased since the spring, but threats to global trade persist.

While the Bank of Canada now feels comfortable enough to issue formal forecasts, Macklem said the projections will put a lot of weight on the risks. It also also cited Macklem as saying businesses are telling the central bank in surveys that the ongoing uncertainty is holding them back from investments and hiring, but the artificial intelligence boom has been a "countervailing force" to boost investment in the face of uncertainty.

RBC in a strategy note published just as the markets closed Friday assigned a 70% chance to an October cut. It noted Q3 GDP is tracking close to the BoC's MPR estimate, the labour market is soft (unemployment rate at same level as when the BoC cut in September and three month hiring trends are at low end of historical range). It also noted upside inflation risks have moderated and growing evidence of softening wages. RBC said the onus is on a high CPI print (0.3% or greater on core CPI measures) to derail an October cut and weaker growth data to justify terminal dipping below 2.25%.

On the week ahead, RBC in its regular Friday 'Forward Guidance' note said the Bank of Canada will be closely watching September's consumer price index report on Tuesday, August's retail sales data on Thursday as well as its own Q3 Business Outlook Survey on Monday ahead of an interest rate decision on Oct. 29.

According to RBC, it is unlikely that policymakers cut rates in September expecting that just one 25 basis point reduction would be sufficient. RBC expects them to follow with another 25 basis point cut in Q4, most likely later this month.

But RBC noted the BoC did leave additional rate reductions contingent on economic data, and inflation not surprising significantly to the upside. RBC does not think details of a firmer than expected jobs report in September alone is enough to derail another rate cut and said inflation trends look broadly similar in September to August.

RBC expects headline CPI growth of 2.3% year over year in September, up from 1.8% in August as the pace of energy price declines slowed. That would leave inflation tracking close to RBC's Q3 base case assumption of a 2% quarterly average. Food price growth likely eased last month, but underlying price pressures appear to have firmed, it noted.

RBC looks for inflation excluding food and energy to rise to 2.6% from 2.4% in August, suggesting modest upward pressure in other categories. It noted the BoC's preferred core inflation measures continue to hover near 3% year-over-year, and about 2.5% on a three-month rolling average. Both are still running above the BoC's 2% inflation target, but are similar to the month earlier.

Of commodities today, gold fell off a record high late afternoon Friday as traders took profits following five days of record highs on buying momentum for the precious metal. Gold for December delivery was last seen down US$61.30 to US$4,243.30 per ounce.

West Texas Intermediate crude oil edged up from a five-month low following three days of losses that came on warnings of an over-supplied market. WTI crude oil for November delivery closed up $0.08 to settle at US$57.62 per barrel, while December Brent oil was last seen up US$0.30 to US$61.36.