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Equities

Canada’s main stock index ticked higher at Friday’s opening bell but remained on track for its worst weekly showing since March 2020. Key U.S. indexes put in a mixed start with concerns about the economic impact of aggressive rate moves still casting a shadow over markets after the previous session’s deep rout.

At 9:33 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 89.15 points, or 0.47 per cent, at 19,093.21.

In the U.S., the Dow Jones Industrial Average fell 14.37 points, or 0.05 per cent, at the open to 29,912.70.

The S&P 500 opened lower by 0.87 points, or 0.02 per cent, at 3,665.90, while the Nasdaq Composite gained 51.45 points, or 0.48 per cent, to 10,697.55 at the opening bell.

Rate concerns and fears about a possible recession have been key worries for traders this week with the Federal Reserve, the Bank of England and Swiss National Bank all hiking rates. In the case of the Fed, it hiked rates by an outsized three-quarter percentage points, the most in decades. Early Friday, the Bank of Japan bucked the trend, keeping ultra-low interest rates in place and forecast borrowing costs would remain at “present or lower”.

“Shell-shocked investors are thankful for some calm, and for the time being, they are finding solace from lower bond yields via a safe-haven bid due to the persistent equity market sell-off,” Stephen Innes, managing partner with SPI Asset Management, said in a note.

“There is also a sense of relief the BoJ held steady on policy, as the last thing the market needed was another blowdown equity valve to give way,” he said.

In Canada, The Globe’s Mark Rendell and Bill Curry report that Finance Minister Chrystia Freeland did not offer any new prescriptions for taming inflation and alleviating the strains consumers are feeling as prices in Canada rise to their highest levels in decades, but vowed that Ottawa will focus on fiscal restraint and helping those most in need. Ms. Freeland spoke in Toronto on Thursday afternoon.

Many economists are now forecasting that the Bank of Canada will follow the Fed’s lead and raise interest rates in this country by 75 basis points at its next policy meeting as it looks to stem inflationary pressures. Canadians will get their next reading on inflation, measured by the consumer price index, next week.

On the corporate side, Adobe shares were down about 3 per cent in premarket trading after the company’s latest results topped market forecasts but it also trimmed its revenue forecast for the year. Adobe now expects full-year revenue of US$17.65-billion, compared with earlier estimates of about US$17.90-billion.

Overseas, the pan-European STOXX 600 was up 1,13 per cent by midday. Britain’s FTSE 100 gained 1.02 per cent. Germany’s DAX and France’s CAC 40 rose 1 per cent and 0.67 per cent.

In Asia, Japan’s Nikkei fell 1.77 per cent in the wake of Wall Street’s selloff. Hong Kong’s Hang Seng rose 1.1 per cent, recouping losses seen early in the session.

Commodities

Crude prices turned higher, reversing early losses, but looked set for weekly declines as worries about the broader economy and the potential impact on demand capped gains.

The day range on Brent is US$118.59 to US$120.74. The range on West Texas Intermediate is US$116.33 to US$118.64. Both benchmarks were on track for losses for the week. For WTI, it would be the first weekly decline in eight.

“Once again, Brent crude and WTI saw some heavy selling intraday as markets tried to price in a plethora of central bank hikes and potential recessions,” OANDA senior analyst Jeffrey Halley said.

“Unfortunately, none of that changes the fact that despite those risks, the world remains short of crude supply from OPEC+, and global refining capacity, squeezing gasoline and diesel prices higher in a stagflationary embrace.”

In other commodities, gold prices were down in early going, hit by a higher U.S. dollar, and looked set for their biggest weekly decline since the middle of last month.

Spot gold dropped 0.6 per cent to US$1,846.33 per ounce by early Friday morning. U.S. gold futures dipped 0.1 per cent to US$1,849.00. Prices are down more than 1 per cent so far in a volatile week.

“Despite the noise of this week, it still remains anchored in the middle of its one-month range,” Mr. Halley said. “The overnight price action shows that the inverse correlation to the U.S. dollar is as strong as ever.”

Currencies

The Canadian dollar was weaker, trading just above 77 US cents in the predawn period, while its U.S. counterpart gained after recent declines.

The day range on the loonie is 76.99 US cents to 77.29 US cents.

There were no major Canadian economic releases on Friday’s calendar, leaving the loonie to move alongside broader market risk sentiment.

“The CAD is not finding any support this morning from the bounce in risk assets, which has been a stronger correlation driver for the CAD recently,” Shaun Osborne, chief FX strategist with Scotiabank, said in an early note.

On world markets, the U.S. dollar index, which weighs the greenback against a basket of six currencies, rose 0.6 per cent to 104.48.

Meanwhile, Japan’s yen fell after the Bank of Japan went against the tide, holding rates steady while other world counterparts hike borrowing costs.

Against the yen, the U.S. climbed 1.6 per cent to 134.14 yen following volatility in the immediate aftermath of the BOJ’s decision, according to a Reuters report. The yen hit a 24-year low on Wednesday of 135.6 per U.S. dollar.

The Australian dollar, often viewed as a proxy for risk sentiment, fell 0.9 per cent to US$0.6981 amid a mixed session for Asian stocks.

In bonds, the yield on the benchmark U.S. 10 year note was down modestly at 3.212 per cent after a volatile week.

More company news

The Globe’s James Bradshaw reports Canadian Imperial Bank of Commerce raised its profit target in a show of confidence as chief executive officer Victor Dodig made a pitch to investors on Thursday that he has built a different, more reliable bank. CIBC boosted its target growth rate for adjusted earnings a share to 7 to 10 per cent annually through 2025, from 5 to 10 per cent, and predicted similar levels of revenue growth at an investor presentation held at its new Toronto headquarters. The bank also increased its target for adjusted return-on-equity to 16 per cent from 15 per cent.

Bausch Health Companies Inc said it was suspending plans for the initial public offering of its unit Solta Medical due to challenging market conditions. Bausch, previously known as Valeant Pharmaceuticals, said it would revisit alternative paths for medical esthetics company Solta in future.

Cannabis company Hexo Corp. says Zenabis Global Inc., a wholly owned subsidiary, has filed for protection under the Companies’ Creditors Arrangement Act. The company says Zenabis made the filing in Quebec Superior Court to restructure its business and financial affairs. Hexo says the petition is limited to the Zenabis Group. Neither Hexo nor any of its subsidiaries, other than the members of the Zenabis Group, are petitioners or parties to the proceedings, the company says.

Economic news

(8:30 a.m. ET) Canada’s industrial product and raw materials price indexes for May.

(8:30 a.m. ET) Canadian international securities transactions for April.

(9:15 a.m. ET) U.S. industrial production and capacity utilization for May.

(10 a.m. ET) U.S. leading indicators for May.

With Reuters and The Canadian Press