6 mins
Stock markets and the economy

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March 2024 - Monetary easing on the horizon

The global equity markets continued to advance in March as inflation concerns eased and investors priced in rate cuts by the major central banks over the course of the year. 


At its most recent meeting, the U.S. Federal Reserve (Fed) confirmed that it was still considering three rate cuts of 25 basis points each, for a total reduction of 0.75% in 2024, according to forecasts by the members of the Federal Open Market Committee (FOMC), which sets the Fed’s monetary policy. For its part, the Swiss National Bank opted to lower its key interest rate, becoming the first of the major Western central banks to adjust its monetary policy since the start of tightening cycle that began in 2021. 

Variation vs
Variation vs
Interest rate in Canada (%)
Key rate
Key rate 5.00 0.00 0.00
Commodities ($US)
Oil (WTI)
Oil (WTI) $83.96 6.0% 16.8%
EUR/CAD 1.46 -0.3% 0.0%
JPY/CAD 0.01 -1.2% -4.4%
USD/CAD 1.36 -0.1% 2.4%

Sources: Bank of Canada, U.S. Energy Information Administration


4.1% (S&P/TSX Composite 31-03-2024)

In March, the Canadian stock market recorded its best monthly performance since the start of the year. The S&P/TSX Composite Index closed the month with a return of 4.1% on the strength of higher commodity and oil prices. The market also benefited from lower inflation for the second month in a row. Investors now expect the Bank of Canada to cut its key rate in June because of inflation’s downward trend. Most sectors posted gains, with the exception of communication services and consumer staples. 

The Canadian bond market was relatively stable in March, with the FTSE Canada Universe Bond Index returning 0.5%.


3.0% (S&P 500 31-03-2024 in CAD)

The upward momentum on the U.S. market continued in March, as the S&P 500 Index recorded its fifth straight monthly gain, returning 3.2% in U.S. dollars and 3.0% in Canadian dollars. As already noted, the market welcomed the Fed’s forecasts for rate cuts, and economic growth remained strong. All sectors contributed to this solid performance, but energy, materials and utilities had the highest returns in absolute terms.


3.6% (MSCI Europe 31-03-2024 in CAD)

European equities also advanced, on expectations of an interest rate cut enabled by slowing inflation. The MSCI Europe Index returned 4.6% in local currencies. The return for Canadian investors was 3.6% owing to the loonie’s strength against the main European currencies, such as the euro, the Swiss franc and the British pound. All sectors, without exception, recorded gains, with financials, health care and industrials as the main contributors.


2.6% (MSCI AC Asia-Pacific 31-03-2024 in CAD)

The MSCI All Country Asia Pacific Index ended March with a return of 3.5% in local currencies and 2.6% in Canadian dollars. The increase was due mainly to a solid performance by the Japanese stock market. Unlike its counterparts in the developed markets of the West, the Bank of Japan raised interest rates for the first time in 17 years, ending its negative interest rate policy in response to above-target inflation as well as strong wage growth. In Japan, this inflation is seen as a positive sign for the country, indicating a recovery in growth after years of deflation or moderate inflation.


2.3% (MSCI Emerging Markets 31-03-2024 in CAD)

Emerging markets also recorded a positive performance during the month. The MSCI Emerging Markets Index closed the month with a gain of 3.1% in local currencies and 2.3% in Canadian dollars. Taiwan and South Korea stood out as a result of their high exposure to the information technology sector, particularly semiconductors, amid the ongoing craze for artificial intelligence.

Reading in progress:March 2024 - Monetary easing on the horizon


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