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Equities

Canada’s main stock index opened higher Friday with helped by gains in materials shares on the back of higher gold prices. On Wall Street, key indexes also advanced in early trading with a weaker-than-expected reading on hiring in April easing investor concerns about a future move by the Federal Reserve.

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Just after the opening bell, the Toronto Stock Exchange’s S&P/TSX composite index was up 33.44 points, or 0.17 per cent at 19,324.42.

In the U.S., the Dow Jones Industrial Average rose 29.74 points, or 0.09 per cent, at the open to 34,578.27.

The S&P 500 opened higher by 8.72 points, or 0.21 per cent, at 4,210.34, while the Nasdaq Composite gained 90.25 points, or 0.66 per cent, to 13,723.09 at the opening bell.

Ahead of the open, the U.S. Labor Department reported that nonfarm payrolls rose by 266,000 in April, far fewer than the markets had been expecting. Economists had been forecasting an increase of around 1 million positions.

“The unemployment rate rose by a tick to 6.1 per cent as the labor force participation rate climbed and the household survey also showed a slowdown in hiring,” CIBC senior economist Katherine Judge said. “We’ll stick to our view that there will be much stronger job gains ahead, but today’s data will leave the Fed’s dovish tone intact.”

In this country, Statistics Canada says the economy shed 207,000 jobs last month as COVID-19 restrictions hit parts of the country. Economists had been expecting a decline of about 160,000 jobs. The jobless rate rose to 8.1 per cent, up 0.6 percentage points from March.

“With tightened restrictions in response to the third wave still in place to begin May, and some parts of the country requiring even harsher measures, more job losses could show up in the next report,” CIBC senior economist Royce Mendes said.

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“The good news is that the curve is bending in some regions of the country and vaccinations are picking up pace, both of which should help the labour market begin to recover in June.”

On the corporate side, Canadian earnings continue to roll in with results from Air Canada, Telus, Hydro One and Obsidian among others.

Ahead of the opening bell, Air Canada reported a net loss of $1.304-billion or $3.90 per diluted share in the first quarter compared with a net loss of $1.049-billion or $4.00 per diluted share a year earlier. Operating revenue fell to $729-million in the first quarter from $3.72-billion a year earlier.

Overseas, Britain’s FTSE 100 rose 0.61 per cent. Germany’s DAX added 1.28 per cent. France’s CAC 40 gained 0.18 per cent.

In Asia, Japan’s Nikkei rose 0.09 per cent. Hong Kong’s Hang Seng fell 0.09 per cent.

Commodities

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Crude prices looked set for a weekly gain as optimism over reopening economies offset concerns over rising COVID-19 infections in some regions, including India and Japan.

The day range on Brent is US$67.86 to US$68.65. The range on West Texas Intermediate is US$64.44 to US$65.24. Both benchmarks were steady in early trading but looked set for an advance for the second consecutive week.

“As the third-largest oil importer globally, India remains the weak link in the oil rally narrative,” OANDA senior analyst Jeffrey Halley said.

“It appears to be tempering gains, even if oil’s broader technical picture looks strong. The first signs that India’s COVID-19 tragedy is easing is likely to see bullish fast money pile back into long positioning in force.”

In other commodities, gold prices rose to their best levels in more than two months and were heading for the best week in six months.

Spot gold was up 0.2 per cent at US$1,818.73 per ounce, after hitting its highest since Feb. 16 earlier in the session. Gold gained nearly 3 per cent so far this week.

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U.S. gold futures rose 0.2 per cent to US$1,818.80.

“There is no better combo for the gold bulls than the soft U.S. yields and the rising inflation expectations,” Ipek Ozkardeskaya, senior anaylst with Swissquote, said.

“The major risk to the gold’s advance is a potential, and a quick rise in sovereign yields. Other than that, gold which lagged industrial metals such as copper and aluminum is now ready to get back to the game as an inflation hedge and amass some capital flows in case we see a downside correction in these industrial metal and other commodity prices that recently went off the roof.”

Currencies

The Canadian dollar held above 82 US cents despite a bigger-than-forecast decline in hiring in April

The day range on the loonie is 82.04 US cents to 82.32 US cents. On Thursday, the loonie touched its best level in more than three years. Recent gains have been driven by the Bank of Canada’s recent suggestion that it could begin hiking rates late next year.

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The loonie wavered but was last off earlier lows after Statistics Canada said the economy shed 207,000 positions last month, while the jobless rate jumped to 8.1 per cent. Economists had been forecasting a decline in hiring but most expected a number closer to 160,000.

Meanwhile, a Reuters poll this week also suggested that the loonie could give back some of its recent gains over the coming year as Bank of Canada’s position is offset by a possible change to the U.S. Federal Reserve’s asset purchase program in response to that country’s recovering economy.

On world markets, the U.S. dollar index, which weighs the greenback against a group of currencies, was at 90.841, down less than 0.1 per cent on the day. It was on track for a loss of around 0.5 per cent on the week overall, according to figures from Reuters.

The British pound was a touch stronger against the U.S. dollar at US$1.3911 and steady against the euro at 86.79 pence per euro.

The Australian dollar was down 0.3 per cent versus the U.S. dollar, at 0.77645, while the New Zealand dollar was down 0.4 per cent at 0.72125.

More company news

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Enbridge Inc said quarterly profit rose sequentially as the pipeline operator benefited from a steady recovery in oil prices and energy demand. The Calgary-based company’s adjusted earnings rose to $1.63-billion, or 81 cents per share, in the first quarter ended March 31, from $1.13-billion, or 56 cents per share, in the fourth quarter.

Cenovus Energy Inc swung to a first-quarter profit from the previous three-month period, as global crude recovered on the back of easing COVID-19 restrictions and vaccine rollouts, which elevated demand. The Calgary, Alberta-based company posted net earnings of $220-million, or 10 cents per share, in the quarter ended March 31, from a net loss of $153-million, or 12 cents per share, in the fourth quarter.

Peloton Interactive Inc forecast current-quarter revenue below Wall Street estimates, hurt by a $165-million hit from the recall of its treadmills following reports of multiple injuries and the death of a child in an accident. Its annual revenue forecast of $4-billion came in slightly below estimates and lower than a prior outlook for $4.075-billion or more. It expects fourth-quarter revenue of about $915-million versus estimates of $1.17-billion.

Economic news

(830 a.m. ET) Canada employment report for April.

(830 a.m. ET) U.S. nonfarm payrolls report for April.

(10 a.m. ET) U.S. wholesale inventories for March.

With Reuters and The Canadian Press

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