Oct 27 (Reuters) - Futures linked to Canada's resource-heavy main stock index were flat on Monday with sliding commodity prices offsetting potential gains from improving U.S.-China trade relations.
December futures on the S&P/TSX index were up 0.06% at 05:41 a.m. ET (0941 GMT).
Top Chinese and U.S. economic officials sketched out on Sunday a trade deal framework for U.S. President Donald Trump and his Chinese counterpart Xi Jinping to decide on later this week in their much-awaited meeting in South Korea.
The prospective deal would pause steeper American tariffs and Chinese rare earths export restrictions, offering some relief to investors who have been navigating tense trade relations between the world's two top economies.
Wall Street futures jumped on the news with Nasdaq futures (.NQc1), up 1%.
However, Canadian market optimism was constrained by weakness across key commodity prices. Gold and silver prices eased over 1% due to a stronger U.S. dollar and signs of easing U.S.-China trade tensions.
Similarly, oil prices , fell more than 1%.
Investor attention this week will also be on central bank decisions in both Canada and the U.S.
According to a Reuters poll of economists, the Bank of Canada is expected to implement a 25-basis-point interest rate reduction on October 29, marking its second consecutive cut, as it moves to bolster an economy vulnerable to U.S. tariff threats.
The Federal Reserve, announcing its decision the same day, is widely anticipated to match with its own 25-basis-point reduction.
On Friday, the Toronto Stock Exchange's composite index (.GSPTSE), rose as investors shrugged off new trade frictions between the U.S. and Canada.
Trump on Thursday ended trade talks with Ottawa over the tariff-related ad, which Trump said was misleading. On Saturday, he said he was increasing tariffs on Canada by an additional 10% "above what they're paying now".
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Reporting by Ragini Mathur in Bengaluru; Editing by Vijay Kishore
