Equities
Canada’s main stock index hit its best level in more than five months early Thursday, buoyed by higher copper and gold prices and improved global sentiment after the minutes from the most recent Federal Reserve meeting hinted at a pullback in the size of rate hikes.
At 9:32 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 59.53 points, or 0.29 per cent, at 20,341.79.
U.S. markets are closed Thursday and will close early on Friday.
“The Fed is simply running the town, which is the message traders have taken from the fresh FOMC minutes,” AvaTrade chief market analyst Naeem Aslam said.
“The fact that minutes have confirmed that the Fed is ready to slow down the pace of interest rates is good news, as market players have been abundantly worried about their monetary policy,” he said.
Mr. Aslam described the expected move as a “hawkish slowdown” because the Fed is still going to increase interest rates “only the difference is that from now on, we are not going to see a massive interest rate hike.”
In this country, Bank of Canada governor Tiff Macklem told Parliamentarians that Inflation remains too high and interest rates need to keep rising. Mr. Macklem appeared before the House Standing Committee on Finance late Wednesday. The Bank of Canada has raised interest rates six times this year, and is widely expected to announce another rate hike on Dec. 7, the Globe’s Mark Rendell reports.
Thursday's analyst upgrades and downgrades
Overseas, the pan-European STOXX 600 was up 0.46 per cent near midday. Britain’s FTSE 100 gained 0.09 per cent. Germany’s DAX and France’s CAC 40 advanced 0.87 per cent and 0.44 per cent, respectively.
In Asia, Japan’s Nikkei advanced 0.95 per cent while Hong Kong’s Hang Seng gained 0.78 per cent.
Commodities
Crude prices were weaker, adding to the previous session’s declines, after reports that G7 countries are considering a price cap on Russian crude above current trading levels.
Both Brent and West Texas Intermediate were lower in the early premarket period. On Wednesday, the two benchmarks each lost about 3 per cent.
Reuters reports that the G7 is looking at a cap on Russian seaborne oil at $65-$70 a barrel, according to a European official, though European Union governments have not yet agreed on a price. A higher price cap could make it attractive for Russia to continue to sell its oil, reducing the risk of a supply shortage in global oil markets.
“Because the Russian oil is already trading with a certain discount, the price cap proposed by the European leaders yesterday match the price that the Russian oil is already exchanged between Russia, and whoever is willing to buy the cheaper Russian oil,” Swissquote senior analyst Ipek Ozkardeskaya said.
“Therefore, it’s obvious that a price cap of around $65/70 won’t damage the Russian output.”
Meanwhile, prices also felt some downward pressure from the latest U.S. inventory figures from the U.S. Energy Information Administration. That report showed that a rise in both gasoline and distillate inventories last week, although crude stocks fell by 3.7 million barrels, more than analysts had been forecasting.
In other commodities, gold prices rose above the key $1,750 level after minutes of the U.S. Federal Reserve’s latest policy meeting signalled slower interest rate hike.
Spot gold rose 0.3 per cent to US$1,754.49 per ounce by early Thursday morning. U.S. gold futures advanced 0.5 per cent to US$1,755.00.
Currencies
The Canadian dollar advanced early Thursday while its U.S. counterpart continued to struggle after the Fed suggested smaller rate hikes could be in the offing.
The day range on the loonie was 74.84 US cents to 75.03 US cents.
There were no major Canadian economic releases due Thursday.
On world markets, the U.S. dollar index, which measures the greenback against six major peers, was little changed at 105.93, after sliding 1.1 per cent on Wednesday, according to figures from Reuters.
The euro was up 0.2 per cent at US$1.0415, while Britain’s pound was last trading at US$1.2086, up 0.3 per cent on the day. The pound rallied 1.4 per cent on Wednesday after preliminary British economic activity data beat expectations, although it still showed that a contraction was under way, Reuters reported.
More company news
The U.S. Federal Trade Commission (FTC) is li-ely to file an antitrust lawsuit to block Microsoft Corp’s $69 billion takeover bid for video game publisher Activision Blizzard Inc, Politico reported on Wednesday, citing people familiar with the matter. A lawsuit challenging the deal is not guaranteed, and the FTC’s four commissioners have yet to vote out a complaint or meet with lawyers for the companies, the report said, adding that the FTC staff reviewing the deal are skeptical of the companies’ arguments.
Economic news
U.S. markets closed (Thanksgiving)
(8:30 a.m. ET) Canada’s Survey of Employment, Payrolls and Hours for September.
With Reuters and The Canadian Press
Terry Weber