Equities
Canada’s main stock index edged higher at Friday’s opening bell on broad-based gains. Key U.S. indexes also gained in early trading with recent economic data fuelling hopes that the Federal Reserve could back off on future rate hikes sooner than expected.
At 9:30 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 29.97 points, or 0.15 per cent, at 20,057.32. The index was up about 0.83 per cent for the week heading into Friday’s session.
In the U.S., the Dow Jones Industrial Average rose 55.96 points, or 0.16 per cent, at the open to 34,464.02.
The S&P 500 opened higher by 15.11 points, or 0.34 per cent, at 4,440.95, while the Nasdaq Composite advanced 76.25 points, or 0.55 per cent, to 13,859.07 at the opening bell.
“So the hawkish Fed outcome Wednesday could add some risk appetite as it lends credence to the view that recession risk from events like the banking sector’s stress has lessened.”
This week, the Federal Reserve held interest rates steady after 10 increases but also indicated more hikes were ahead. The European Central Bank, meanwhile, raised rates by a quarter percentage point on Thursday. Early Friday, the Bank of Japan maintained its ultra-easy monetary policy.
On the corporate side, The Globe’s Alex Posadzki reports this morning that BCE Inc. is asking Canada’s telecommunications regulator to intervene in its now escalating dispute with Rogers Communications Inc. over access to the Rogers-owned wireless network on Toronto’s subway system. BCE, the parent of Bell Canada, has filed an application with the Canadian Radio-television and Telecommunications Commission seeking a series of urgent orders, including one prohibiting Rogers from onboarding its own customers onto the network until it is able to provide access to all wireless carriers.
Elsewhere, shares of Virgin Galactic spiked more than 40 per cent in early trading in New York after announced that monthly commercial flights to the edge of space will begin for ticket-holders in August, following a research flight planned for the end of June, according to Reuters.
Overseas, the pan-European STOXX 600 was up 0.55 per cent by midday. Britain’s FTSE 100 gained 0.16 per cent. Germany’s DAX and France’s CAC 40 added 0.42 per cent and 1.01 per cent, respectively.
In Asia, Japan’s Nikkei ended up 0.66 per cent. Hong Kong’s Hang Seng advanced 1.07 per cent.
Commodities
Crude prices reversed early losses and looked set for a weekly gain.
The day range on Brent was US$75.35 to US$75.95 in the early premarket period. The range on West Texas Intermediate was US$70.28 to US$70.84. Both benchmarks added about 3 per cent Thursday and are on track for the first weekly gain in three.
“Crude prices are trying to find support as the global growth outlook remains vulnerable to further shocks from aggressive rate hiking campaigns,” OANDA senior analyst Ed Moya said in a note.
“The Fed will keep the short-term outlook volatile as they are eyeing further rate hikes, while China rushes to deliver stimulus to aid their struggling post-COVID recovery.”
Crude prices have drawn some support recently from a weaker U.S. dollar as well as expectations that OPEC+’s planned output cuts along with additional reductions by Saudi Arabia will shore up markets.
In other commodities, spot gold rose 0.2 per cent to US$1,961.09 per ounce by early Friday morning, drawing support from a weaker greenback but capped by expectations of further U.S. interest rate hikes. U.S. gold futures edged 0.1-per-cent higher to US$1,973.40.
“Gold is vulnerable to a plunge towards US$1,900 now that we are bracing for more tightening by both the Fed and ECB,’ Mr. Moya said.
Currencies
The Canadian dollar steadied ahead of the North American open and was on track for weekly gains.
The day range on the loonie was 75.52 US cents to 75.76 US cents in the predawn period. The Canadian dollar is up 0.90 per cent against the greenback over the last five days and up more than 2 per cent for the year to date.
“Solid gains in global stocks but some renewed softness in crude oil prices provide a mixed backdrop for the CAD on the day,” Shaun Osborne, chief FX strategist with Scotiabank, said. “Commodity FX generally has traded a little softer on the session, possibly reflecting bank forecast downgrades for China growth following a run of soft data for May.”
On world markets, the U.S. dollar index, which weighs the greenback against a group of currencies, edged up 0.1 per cent to 102.25 in early trading after falling to a one-month low on Thursday, according to figures from Reuters.
The euro flattened at US$1.0951 after jumping more than 1 per cent yesterday in the wake of the ECB’s decision to hike rates by a quarter percentage point.
Japan’s yen, meanwhile, fell broadly following the Bank of Japan’s decision to maintain its ultra-easy monetary policy position. The yen hit a fresh 15-year low of 154.70 per euro, down 0.7 per cent on the day, Reuters reported.
Against the U.S. dollar, the Japanese currency fell 0.6 per cent to 141.22 yen.
In bonds, the yield on the U.S. 10-year note was slightly higher at 3.732 per cent ahead of the North American opening bell.
Economic news
(8:30 a.m. ET) Canadian wholesale trade for April.
(8:30 a.m. ET) Canadian international securities transactions for April.
(10 a.m. ET) U.S. University of Michigan Consumer Sentiment Index for June.
With Reuters and The Canadian Press
Terry Weber