Equity Markets
U.S. and Canadian stock markets are set for a higher open Friday ahead of solid all-important U.S. jobs data, which will be closely watched due to the U.S. Federal Reserve meeting next week, and data from Canada on housing starts. Markets are also positive following some good news from Britain.
The U.S. Federal Reserve is expected next week to announce a rise in interest rates and offer guidance on the pace of further increases. Strong payrolls would support the case for aggressive rate rises.
U.S. employers added a robust 228,000 jobs in November, a sign of the job market's enduring strength in its ninth year of economic recovery.
The Labor Department says the unemployment rate remained at a 17-year low of 4.1 per cent.
America's economy is expanding at a healthy pace, and in many cases employers are scrambling to hire enough qualified workers. Over the past six months, growth has exceeded an annual rate of 3 per cent, the first time that's happened since 2014. Consumer confidence has reached its highest level since 2000.
Healthy hiring and a low unemployment rate have yet to push up wages, which rose 2.5 per cent in November compared with a year earlier. The last time unemployment was this low, wages were rising at a 4 per cent rate.
According to a Reuters survey of economists, they were expecting nonfarm payrolls to rise by 200,000 jobs last month after surging 261,000 in October.
The report probably will have little impact on expectations that the Federal Reserve will raise interest rates at its Dec. 12-13 policy meeting, but it could help shape the debate on monetary policy next year.
Futures pointed to a higher opening for Canada's main stock index on Friday ahead of Canadian housing data and as oil prices edged up on rising Chinese demand.
Canada Mortgage and Housing Corp. says the pace of housing starts picked up in November, pushing the six-month trend to the highest level in nearly a decade.
In November, the seasonally adjusted annualized rate of housing starts across Canada was 252,184 units — up from 222,695 units in October.
That was higher than expectations for 215,000 units in November.
Overseas, a breakthrough in Brexit negotiations pushed sterling to a six-month high against the euro on Friday and added momentum to an upswing in world stocks underpinned by strong economic news from China and Japan.
Britain and the European Union struck a deal on Friday to move on to talk about trade and a transition period after they agreed the outline of their divorce.
Sterling was up nearly half a per cent against the euro to hit a six-month high and stock indices across the continent opened sharply up on the news.
"While agreeing a divorce bill has little economic significance for the price of sterling, the political significance of progress in Brexit talks is quite profound," said Viraj Patel, an FX strategist for ING.
"It reduces the tail risk of a 'no deal' scenario and a complete breakdown in negotiations."
On Thursday, Canada's main stock index ended higher, helped by gains among energy stocks as oil prices picked up as well as rising financial, consumer and technology stocks.
Wall Street also rose on Thursday, buoyed by popular technology companies including Facebook and Alphabet, while shares of yoga pants seller Lululemon Athletica also worked up a sweat.
The Dow Jones industrial average rose 0.29 per cent to end at 24,211.48 points, while the S&P 500 gained 0.29 per cent to 2,636.98. The Nasdaq Composite added 0.54 per cent to 6,812.84.
The Toronto Stock Exchange's S&P/TSX composite index closed up 106.9 points, or 0.67 per cent, at 16,015.68.
In Europe, Britain's FTSE rose 0.33 per cent, Germany's DAX gained 1.2 per cent and France's CAC was up 0.5 per cent.
Earlier, Asian shares rallied for a second session in a row as economic news from China and Japan beat all expectations.
Beijing reported exports surged 12.3 per cent in November from a year earlier, more than double the forecast, while imports climbed almost 18 percent.
Revised data showed Japan's economy growing twice as fast as first thought as business spending jumped.
The Nikkei closed up 1.4 per cent, the Shanghai index was up 0.55 per cent and the Hang Seng added 1.2 per cent.
Commodities
Both oil and gold prices were lower.
Oil prices edged up on Friday, helped by rising Chinese crude demand and threats of a strike in Africa's largest oil exporter.
But prices were still on track for their largest weekly loss since early October amid concerns that rising U.S. production would undermine OPEC-led supply cuts aimed at curbing a glut.
Brent crude was up 39 cents at $62.59 a barrel, but still heading for a weekly slide of 1.8 per cent.
U.S. West Texas Intermediate (WTI) crude was at $56.07 a barrel, up 38 cents from their last settlement. The contract was on track for a 2.2-per-cent loss on the week.
China's crude oil imports rose to 9.01 million barrels per day (bpd), the second highest on record, data from the General Administration of Customs showed on Friday.
Booming demand will push China ahead of the United States as the world's biggest crude importer this year.
U.S. investment bank Jefferies forecast 2018 global oil demand growth of 1.5 million bpd, driven by almost 10 percent demand growth in China.
"Generally speaking, the market is looking more healthy than sick," said Tamas Varga, analyst with PVM Oil Associates.
Gold prices steadied on Friday but were on track for their biggest weekly fall since May ahead of U.S. employment data later that could influence the pace of U.S. interest rate rises.
Gold this week broke below a recent trading range and tumbled through technical levels to its lowest since July as progress on U.S. tax reform fuelled optimism about the U.S. economy and boosted the dollar.
"You can put it down to the strength of the dollar and the ebullience of investors regarding equities and all things risk-on," said ETF Securities analyst Martin Arnold.
"When in such a positive mindset investors don't look for defensive assets like gold."
Spot gold was down 0.1 per cent at $1,245.66 an ounce, close to Thursday's low of $1243.71, the weakest since July 26. It had fallen 2.7 per cent this week, its third consecutive weekly fall and the biggest since early May. U.S. gold futures were 0.4 per cent lower at $1,247.80.
Among other precious metals, silver was up 0.4 per cent at $15.78 but down 4 per cent this week. Platinum was 0.1 per cent lower at $892.20 an ounce and on track to fall nearly 5 per cent this week, its biggest weekly loss in nine months. Palladium was up 0.1 per cent at $1,013.75 an ounce.
Currencies and bonds
The dollar rose 0.2 per cent against a trade-weighted basket of its rivals on Friday and was on track for its biggest weekly rise in nearly six weeks after a potential government shutdown this weekend was averted and hopes that the U.S. tax bill will pass.
The dollar was given an extra boost after a funding bill eased fears of a U.S. government shutdown this month. A stronger dollar makes bullion more expensive for holders of other currencies and can dampen demand.
Sterling was the only exception, gaining against a slew of currencies amid relief that Britain and the European Union had struck a deal on Friday that will allow a second phase of talks to begin on the British exit from the EU.
The dollar index, which gauges the U.S. currency against a basket of six major rivals, was up 0.2 per cent on the day at 93.961, up more than 1 per cent for the week, its biggest rise since late October.
The Canadian dollar was up slightly and was just shy of the 78-cent (U.S.) mark.
On Thursday, the Canadian dollar weakened against its U.S. counterpart, adding to losses from the previous session, when the Bank of Canada held interest rates steady and tempered expectations for a hike early next year.
The central bank struck a more dovish tone than investors had expected after last week's strong employment data.
"If the loonie had a stocking hanging on the chimney, it would probably find coal in it," said Brad Schruder, director of corporate sales and structuring at BMO Capital Markets.
"Between now and the end of the year, you are probably going to see the Canadian dollar lose anywhere from another 2 cents to 2-1/2 cents in value against the U.S. dollar," he added.
The U.S. 10-year bond yield slid slightly to 2.39 per cent ahead of U.S. jobs data, while Canada's 10-year bond was down at 1.88 per cent.
Stocks set to see action
Ted Rogers's adult children are moving into more senior roles on the board of the company the late entrepreneur founded. Rogers Communications Inc. said on Thursday that Edward Rogers will become chairman of the board on Jan. 1, while his sister, Melinda Rogers, will replace him as deputy chair. The pair will leave formal day-to-day management of the company to chief executive officer Joe Natale and his executive team.
Dealership group AutoCanada Inc. has reached a deal with General Motors of Canada Co. that will allow the publicly traded company to own the auto maker's stores outright for the first time. AutoCanada and Pat Priestner, the company's founder and former chairman will divide ownership of nine stores in which the Edmonton-based company held a majority stake with no voting rights. The three way deal was announced late Thursday.
Canadian beverage retailer DavidsTea is evaluating its strategic options more than two years after it went public and soon after rival Teavana shut its doors. The Montreal-based company announced the move Thursday while reporting weaker than expected third-quarter results. DavidsTea says its losses surged 30 per cent to $6.5-million from $5-million a year ago.
Barclays and LLoyds Banking Group were among New York's biggest gainers in early trade, up more than 4 percent after Britain secured EU agreement to move on from the first-round of Brexit negotiations.
U.S.-listed shares of European banks Credit Suisse, Deutcshe Bank, ING Groep and Banco Santander were all up by between 2 per cent and 4 per cent after a long-sought revision to Basel III regulatory norms was published.
Shares of American Outdoor Brands slumped about 19 pe rcent after Smith & Wesson fire arms maker provided a disappointing earnings forecast.
Alexion Pharmaceuticals rose 5 per cent in thin trading after the New York Times reported hedge fund Elliott Management is urging the company to take more action to boost its stock price, including exploring a sale.
Shares in travel services company Trivago jumped 12 per cent in premarket trading after Deutsche Bank raised its rating on the stock to "buy" from "hold" and in a note it said the company should see benefits from a stabilizing bidding environment among its big clients.
More reading: Friday's small-cap stocks to watch
More reading: Poll: Loonie to rise once NAFTA uncertainty clears
Economic News
U.S. employers added a robust 228,000 jobs in November, a sign of the job market's enduring strength in its ninth year of economic recovery.
The Labor Department says the unemployment rate remained at a 17-year low of 4.1 per cent.
America's economy is expanding at a healthy pace, and in many cases employers are scrambling to hire enough qualified workers. Over the past six months, growth has exceeded an annual rate of 3 per cent, the first time that's happened since 2014. Consumer confidence has reached its highest level since 2000.
Healthy hiring and a low unemployment rate have yet to push up wages, which rose 2.5 per cent in November compared with a year earlier. The last time unemployment was this low, wages were rising at a 4 per cent rate.
The Street expected non-farm payrolls to advance by 198,000 with an unemployment rate of 4.1 per cent (unchanged from October).
Canada Mortgage and Housing Corp. says the pace of housing starts picked up in November, pushing the six-month trend to the highest level in nearly a decade.
The Ottawa-based Crown corporation says construction of multiple-unit projects in Toronto has been a driving force behind the trend.
In November, the seasonally adjusted annualized rate of housing starts across Canada was 252,184 units — up from 222,695 units in October.
Multiple-unit urban starts accounted for 175,016 units, up 16.9 per cent, while single-detached urban starts were up 7.5 per cent to 60,396 units and rural starts were estimated at 16,772.
CMHC's six-month housing starts trend rose to 226,270 units in November, from 216,642 units in October.
(8:30 a.m. ET) Canada's capacity utilization for Q3 is announced. Estimate is 84.5 per cent, down from 85.0 per cent in the previous quarter.
(10 a.m. ET) U.S. wholesale inventories for October are released. Consensus is a decline of 0.4 per cent from September.
(10 a.m. ET) U.S. University of Michigan consumer sentiment is released. Consensus is 99.0, up from 98.5 in the previous month.
With files from Reuters and Bloomberg