The S&P/TSX Composite Index will have another year of double-digit returns in 2007, says a report by CIBC World Markets.

Despite a sluggish Canadian economy, continued strong demand for energy, gold and base metals will push the index up to 14,250 by the end of the year.

“The growing wedge between TSX performance and Canada’s overall economic performance will underscore the extent to which the TSX has far more leverage to strong world growth than weak North American growth,” says Jeff Rubin, CIBC World Markets’ chief strategist and chief economist.

The report also predicts multiple rate cuts over the year by the Bank of Canada.

“Those same rate cuts will push long Canada bond yields to record lows,” he adds, “with long Canada yield finishing up the year around 3.5%.”

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