Equity Markets
Canada's main stock index opened moderately higher on Friday, as the index's heavyweight sectors offset sharp losses in BlackBerry Ltd. shares, which tumbled after first quarter sales missed expectations.
The Toronto Stock Exchange's S&P/TSX composite index rose 80.23 points, or 0.53 per cent, to 15,300.13 shortly after the open.
Six of the index's 10 main groups were in positive territory.
Home Capital gained 4.3 per cent as investors got more details about Warren Buffett's Bershire Hathaway's deal to prop up the troubled lender.
BlackBerry's stock fell 7.4 per cent missed analysts' estimates for total revenue, the majority of which is now made up of software sales.
The Canadian dollar slipped 0.32 of a cent to 75.24 cents (U.S.) after Statistics Canada reported that Canada's annual inflation rate cooled more than expected in May, moving it further away from the Bank of Canada's target and reducing the odds of an interest rate hike next month.
The annual inflation rate declined to 1.3 per cent from April's 1.6 per cent, Statistics Canada said on Friday, the lowest level since November 2016 and below forecasts for 1.5 per cent.
The S&P 500 and Nasdaq Composite opened little changed on Friday amid concerns over oil prices, while the Dow Jones Industrial Average was slightly lower, weighed down by Caterpillar.
The Dow Jones Industrial Average fell 26.17 points, or 0.12 per cent, to 21,371.12. The S&P 500 gained 0.37 points, or 0.01 per cent, to 2,434.87. The Nasdaq Composite added 4.75 points, or 0.08 per cent, to 6,231.94.
The Fed's annual stress test results showed that 34 largest U.S. banks have all cleared the first stage, implying they would be able to maintain enough capital in an extreme recession. Shares of Bank of America, JPMorgan, Wells Fargo and Goldman Sachs were up between 0.5 per cent and 0.74 per cent in premarket trading.
European shares were down, led lower by worries about oil prices and data showing PMI growth slowed. One year on from Britain's shock vote to leave the European Union and cracks are starting to appear in the FTSE 100's rally, as concerns on both political and economic fronts put UK shares on course for their third week of losses in a row.
Britain's blue chip FTSE 100 index was down 0.31 per cent, Germany's Dax was off 0.85 per cent and France's CAC 40 fell 0.58 per cent.
Hong Kong shares were little changed on Friday, and roughly flat for the week, amid concerns that MSCI's decision this week to include China-listed shares to its emerging market benchmark could weaken the city's role as a gateway to investing in China. The Hang Seng index slipped 0.02 per cent while the China Enterprises Index gained 0.3 percent, to 10,430.04 points. The Nikkei was up 0.11 per cent and the Shanghai index was up 0.32 per cent.
Chinese mainland shares rose nearly 1 percent on Friday, enjoying their best week since November after MSCI's decision to include them in its benchmark index. China Shenzen-listed stocks, are up almost 3 percent for the week, after MSCI gave the green light for the inclusion of 222 China-listed stocks, paving the way for some $20 billion of inflows. The market hit an 18-month high on Thursday in the wake of the decision.
Commodities
Oil prices edged up on Friday, recovering some of their steep losses made this week, but the outlook for the commodity remains cloudy as production cuts have failed to sufficiently reduce oversupply.
Crude oil pulled away from this week's 10-month lows, although prices were still set for their worst first-half performance since 1997.
The slide in energy prices has worsened the outlook for inflation creating a headache for the world's major central banks looking to normalise rates after years of ultra-loose policy.
"(The) oil price is the 'poster child' for victory of deflation," analysts at Bank of America Merrill Lynch (BAML) said in a note of weekly investment flows.
Gold prices climbed to one-week highs on Friday, boosted by a lower dollar and economic and political uncertainty around the world, but the prospect of further interest rate rises in the United States limited gains.
Spot gold was up 0.6 percent at $1,257.1 an ounce at 0903 GMT after earlier touching $1,258.00, its highest since June 14. U.S. gold futures rose 0.7 percent to $1,257.8.
Currencies and bonds
The Canadian dollar slipped after a half-cent gain on Thursday, trading near the 75.5 cent (U.S.) level.
The dollar weakened against a basket of major currencies and is now down more than 0.5 percent since this week's earlier highs as doubts about how quickly the Fed will be able to raise rates crept in.
The dollar peaked at a one-month high on Tuesday after the Federal Reserve hiked interest rates last week and left the door open for further monetary tightening later in the year. But it has been stuck in a tight range since, awaiting fresh catalysts.
"For the dollar we're in a waiting game until September," said Trum. "In our view they'll then hike interest rates but then start to talk about the inflation rate - if that doesn't start to go up then future hikes will become more difficult."
Bonds in both Canada and U.S. were down, with the U.S. 10 year at 2.15, off 0.05 and Canadian 10 year bonds at 1.50, off 0.06.
Stocks set to see action
Home Capital's still in the news regarding its lifeline and deal with Warren Buffett's Berkshire Hathaway as more details emerge at how quickly the deal came together. Its shares rose 27 per cent on Thursday.
Canada's BlackBerry Ltd. reported a fall in first quarter revenue that missed analyst estimates as it received fewer orders from its enterprise customers, sending the company's U.S.-listed shares down 7.23 per cent in premarket trading.
Caterpillar was down 1.21 percent at $102.58 following a Deutsche Bank downgrade to "hold."
Bed Bath & Beyond was down 9.28 per cent after the home furnishing retailer reported a bigger-than-expected fall in same-store sales in the first quarter.
The Fed's annual stress test results showed that 34 largest U.S. banks have all cleared the first stage, implying they would be able to maintain enough capital in an extreme recession. Shares of Bank of America, JPMorgan, Wells Fargo and Goldman Sachs were up between 0.5 per cent and 0.74 per cent in premarket trading.
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Economic News
Canadian inflation eased up on the accelerator last month as weaker year-over-year growth in gasoline prices helped slow the annualized rate to 1.3 per cent.
Statistics Canada says the May inflation rate was also lower than April's reading of 1.6 per cent because prices declined in categories such as electricity, bakery products and Internet access services. The estimate was for a rise of 0.2 per cent from April and 1.5 per cent year over year.
The agency says year-over-year gasoline prices rose 6.8 per cent in May after climbing 15.9 per cent in April.
(9:45 a.m. ET) U.S. PMI for June is released.
(10 a.m. ET) U.S. new home sales for May are unveiled. Consensus is an annualized rate increase of 5.3 per cent.
With files from Reuters and Bloomberg