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Equities

Canada’s main stock index started higher Friday buoyed by rising crude prices and a surprise trade surplus. South of the border, Wall Street’s main indexes opened higher after a better-than-expected reading on hiring last month.

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At 9:30 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 138.82 points, or 0.77%, at 18,264.54.

In the U.S., the Dow Jones Industrial Average rose 105.0 points, or 0.34%, at the open to 31029.18. The S&P 500 rose 25.1 points, or 0.67%, at the open to 3793.58, while the Nasdaq Composite rose 136.6 points, or 1.07%, to 12860.039 at the opening bell.

“US stocks were all over the place following the stronger-than-expected employment report,” OANDA senior analyst Edward Moya said.

“The growth outlook is looking better and that should continue to push Treasury yields higher across the curve.  With steady wage increases, that might be supporting the argument that inflation concerns are far away.”

On Friday, the yield on the U.S. 10-year Treasury again spiked above 1.6 per cent after the U.S. Labor Department said non-farm payrolls rose by 379,000 positions last month. Markets had been expecting a number closer to 200,000.

“The job just got harder for Democrats to push through Biden’s $1.9-trillion COVID relief bill,” Mr. Moya said. “The U.S. economy is starting to look a lot better and that will trigger concern over the size of the bill from conservative democrats.”

In this country, Canada posted its largest trade surplus since 2014 in January, at $1.41-billion, on a strong increase in exports as imports edged up, Statistics Canada said on Friday. Analysts polled by Reuters had predicted a deficit of $1.40-billion after a revised $1.67-billion deficit in December.

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Overseas, the pan-European STOXX 600 was down 0.57 per cent in morning trading. Britain’s FTSE 100 fell 0.21 per cent. Germany’s DAX lost 0.82 per cent. France’s CAC 40 slid 0.70 per cent.

In Asia, Japan’s Nikkei ended down 0.23 per cent. Hong Kong’s Hang Seng fell 0.47 per cent.

Commodities

Crude prices jumped Friday, hitting their best level in 14 months, after OPEC and its allies agreed to rollover production cuts to April rather than increase output as the group waits for clearer signs of a solid recovery from the impact of the COVID-19 pandemic.

The day range on Brent is US$66.67 to US$68.50. The range on West Texas Intermediate is US$63.82 to US$65.36. Both gained 4 per cent on Thursday in the wake of the OPEC news. Brent is on track for a gain for the week of about 3 per cent.

“There is not much appetite from a recovering global economy for materially higher oil prices in the near term,” Axi chief global market strategist Stephen Innes said.

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“But It looks clear that OPEC+ will instead run the risk of ‘overheating’ the market temporarily than risk letting it slip back towards oversupply. Despite what OPEC’s balances showed it, the group still opted to hold back increasing output, demonstrating its determination to continue to adopt an extremely cautious stance.”

In addition to continuing current production caps, Saudi Arabia also decided to keep its voluntary cut of 1 million barrels a day through April, despite the recent rally in crude prices.

In other commodities, gold fell to a near nine-month low on Friday and was set for a third straight weekly decline.

Spot gold was steady at US$1,697.60 per ounce, having earlier fallen to its lowest since June 8 at US$1,686.40. Gold is down about 2 per cent for the week so far.

U.S. gold futures fell 0.5 per cent to US$1,692.90.

Currencies

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The Canadian dollar slid alongside weaker risk sentiment as its U.S. counterpart hit its best level in months against global currencies after Fed chair Jerome Powell indicated that he didn’t consider the recent selloff in Treasuries ‘disorderly’.

The day range on the loonie is 78.68 US cents to 79.04 US cents.

For the loonie, the day’s big headline will be January trade numbers. Economists are expecting to see the trade gap narrow.

On global markets, the U.S. dollar index, which weighs the greenback against a group of global currencies, hit a three-month high and last stood at 91.960 in early London trading after gaining 0.7 per cent on Thursday.

The euro slipped 0.4 per cent to a three-month low of US$1.19255 following a 0.7-per-cent decline overnight.

Currencies like the Australian dollar and the New Zealand dollar, which are also vulnerable to weakening risk, were lower.

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The Australian dollar fell 0.6 per cent to US$0.7673, a three-week low, extending Thursday’s 0.7% drop. The New Zealand dollar fell 0.6 per cent to US$0.7140, according to figures from Reuters.

More company news

Costco Wholesale Corp beat analysts’ estimates for second-quarter revenue on Thursday, as people stuck at home spent more on frozen foods, liquor and electronic products. Total revenue rose to $44.77-billion in the quarter ended Feb. 14 from $39.07-billion a year earlier, compared with a Refinitiv IBES estimate of $43.78-billion.

Economic news

8:30 a.m. Statscan releases January international trade numbers

8:30 a.m. U.S. non-farm payrolls for February will be released.

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With Reuters and The Canadian Press

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