TSX Closer: Second-Straight Record Close, Buoyed By Economic Data; Oxford Economics Says "Stand On Guard"

04:24 PM EST, 12/11/2025 (MT Newswires) -- The Toronto Stock Exchange set a second-straight record close Thursday, with investors buoyed by one set of economic data showing Canadian household balance sheets "remained resilient" in the third quarter and another showing a better than expected trade balance.

The resources-heavy index closed up 169.88 points or 0.5% at 31,660.73, topping the prior day's record finish by about 170 points, even as a third of sectors were lower, commodity prices traded wildly mixed and Oxford Economics told its clients to "stand on guard for continued Canadian weakness in early 2026".

Among sectors, the Battery Metals Index led gainers, up 2.4%, with Base Metals up near 2% as gold traded sharply higher by late afternoon Thursday as the dollar and treasury yields weakened after the Federal Reserve, as expected, cut U.S. interest rates by 25 basis points a day earlier. Gold for February delivery was last seen up US$79.00 to US$4,303.t0 per ounce, the highest for the metal since its Oct. 20 record high of US$4,359.40.

Info Tech was down 1% and Energy eased 0.7% as West Texas Intermediate crude oil closed at a seven-week low despite rising geopolitical risk after the United States seized an oil tanker off Venezuela while the International Energy Agency said global inventory builds are slowing even as it expects production to continue rising above demand growth next year. WTI crude oil for January delivery closed down $0.86 to settle at US$57.60 per barrel, the lowest since Oct.20, while February Brent oil was down $0.94 to US$61.27.

Related to energy, Oxford Economics in a 'Cross Asset' note said the price of commodities, which often influence the direction of Canada's equity and macro markets, will offer limited relief for the Canadian dollar. Oxford Economics expects Western Canadian Select oil prices will continue to weaken. It forecast Brent crude prices, which move in line with WCS prices, will fall due to global supply growth outpacing demand and inventories building.

Oxford Economics remains overweight USD/CAD and sees little support for the Canadian dollar in early 2026. It said the interest rate differential will remain unfavorable as it disagrees with markets on the pace of Federal Reserve rate cuts. Tariff uncertainty surrounding US-Mexico-Canada Agreement renegotiations will add further pressure, it added.

In contrast, RBC in a note on today's Canadian household net worth data said while uncertainty about Canada's future trade relationship with the United States continues to add strain, it is worth noting that as of September, 86% of Canadian exports to the U.S. still cross the border duty-free. "Given these mixed but generally improving conditions, we remain cautiously optimistic about the Canadian economic outlook in the year ahead," the bank.

RBC noted Canadian household balance sheets "remained resilient" in Q3, with household net worth growing at a faster pace than in Q2 driven by robust financial asset gains, while the debt-servicing ratio ticked slightly lower from last quarter after an upward revision to Q2.

Still, RBC said, wealth gains are likely, again, not evenly distributed, with Statistics Canada noting the increase in net wealth was led by strong gains in financial asset values, and the top 20% of the wealth distribution holds nearly 70% of all financial assets. It noted that is broadly consistent with earlier reports showing the household wealth gap widening in Q2.

RBC noted housing continued to weigh on wealth in Q3 as prices declined again and debt levels rose. However, it also noted, encouraging signs emerged elsewhere in the economy, with Q3 GDP showing recovered activity from Q2 lows and the unemployment rate ticked lower in October and November. "These improvements suggest that a broader recovery should gradually take hold as economic momentum builds and labour market conditions stabilize further."

Elsewhere, BMO noted the long-awaited September trade data came in even better than Statistics Canada's preliminary estimates. Not only did the trade balance improve from a $6.4 billion deficit to a $0.2 billion surplus (versus an estimated $1.25 billion shortfall in the Q3 GDP figures), but volumes were also firmer. Exports were up 4.9% while imports fell 3.9%. For Q3, as in the accompanying chart, exports increased 3.5% a.r. while imports declined 10.8% annualized. BMO said: "These data are typically volatile and prone to revisions, so we'll caution against reading too much into any one report. Still, the better than expected figures suggest some upside risk for a September revision when the October real GDP report is released later this month."

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