Businessmen pass the Toronto Stock Exchange sing in Toronto
Businessmen pass the Toronto Stock Exchange sing in Toronto, Ontario, Canada July 6, 2017.

Futures for Canada's main stock index inched higher on Friday as the country's two main telecoms firms made headway with their merger deal, but sentiment was expected to be downbeat on worries over "soft landing" challenges for the economy.

Rogers Communications Inc and Shaw Communications Inc finalised an agreement to sell Freedom Mobile to Videotron, a unit of Quebecor Inc, in a C$2.85 billion ($2.23 billion) deal.

The sale could help Rogers and Shaw clear a key antitrust hurdle and pave the way for their C$20 billion merger.

Still, the focus will be on the yield on the Canadian 10-year government bond, which has fallen some 50 basis points below the 2-year yield and is signaling the Bank of Canada may raise interest rates to a level that triggers a recession.

It is the biggest inversion of Canada's yield curve in Reuters data going back to 1994, deeper than the U.S. Treasury yield curve inversion.

Following U.S. data earlier in the week that showed an easing of inflation pressures, money market investors cut their bets that the BoC would hike rates by another three-quarters of a percentage point next month. [BOCWATCH]

September futures on the S&P/TSX index were up 0.1% at 7:31 a.m. ET. The Toronto Stock Exchange's S&P/TSX composite index ended up 0.5% on Thursday, adding to this week's rally and posting its highest closing level since June 10.

Gold financing company Sandstorm Gold beat estimates for quarterly earnings, with revenue rising 36% from a year ago.

ECN Capital Corp met quarterly earnings expectations of 9 cents per share and topped estimates on revenue.

Hydro One, Ontario's biggest electricity distribution company, said a barge moving a crane hit three high-voltage transmission lines causing power outage for a few hours in downtown Toronto on Thursday.

($1 = 1.2785 Canadian dollars)