Canada’s main stock index dipped at Friday’s opening bell with investors weighing the implications of a better-than-expected reading on hiring in August. On Wall Street, key indexes were muted with traders looking ahead to rate announcements from a number of central banks, including the Federal Reserve, in coming weeks.
At 9:30 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was down 28.72 points, or 0.14 per cent, at 20,103.36. The index was down nearly 2 per cent for the week heading into Friday’s session.
In the U.S., the Dow Jones Industrial Average fell 13.32 points, or 0.04 per cent, at the open to 34,487.41.
The S&P 500 opened higher by 0.16 points at 4,451.30, while the Nasdaq Composite gained 5.88 points, or 0.04 per cent, to 13,754.71 at the opening bell.
“The overall mood amongst investors does appear to be becoming gloomier, however despite recent price moves we’re still within the price ranges we’ve been in over the past 6 months,” Michael Hewson, chief market analyst with CMC Markets U.K., said.
“With some key central bank meetings looming in the next 2 weeks we might find the catalyst that breaks us out of these choppy ranges.”
The Federal Reserve’s next rate decision is due Sept. 20. Markets are widely expecting the central bank to hold rates steady although there remains some debate about whether another hike is in the cards by the end of the year. The European Central Bank and the Bank of England also meet in coming weeks.
In Canada, Bank of Canada Governor Tiff Macklem said the central bank’s 2-per-cent inflation target “is now in sight” and that interest rates “may be sufficiently restrictive,” but warned that his team could raise rates again if consumer price growth remains stubborn. Mr. Macklem spoke Thursday afternoon, a day after the central bank kept rates unchanged but also indicated that it would act if necessary to contain inflation.
Early Friday, Canadian investors got a surprisingly strong reading on this country’s labour market.
Statistics Canada said the economy added 39,900 new jobs last month. Economists had been expected a number closer to 20,000 positions. The jobless rate, which had been expected to tick higher, held steady at 5.5 per cent. Annual wage growth in August came in at 5.2 per cent, compared with 5 per cent in July, the government agency said.
Statscan says full-time positions rose by 32,200 jobs while part-time jobs were up 7,800.
“Even though the Bank [of Canada] is still likely done with its interest rate hiking cycle, today’s data is consistent with the notion that rate cuts are not yet on the horizon,” CIBC economist Andrew Grantham said.
Overseas, the pan-European STOXX 600 was down 0.37 per cent in morning trading. Britain’s FTSE 100 slid 0.33 per cent. Germany’s DAX and France’s CAC 40 lost 0.44 per cent and 0.45 per cent, respectively.
In Asia, Japan’s Nikkei fell 1.16 per cent. Markets in Hong Kong were closed.
Crude prices were choppy in early trading but remained on track for weekly gains.
The day range on Brent was US$89.30 to US$90.15 in the early premarket period. The range on West Texas Intermediate was US$86.15 to US$86.95. Heading into Friday’s session both benchmarks were up about 1 per cent.
Both hit their best levels in 10 months early this week on news that Saudi Arabia and Russia would extend voluntary supply cuts through to the end of the year.
“Energy traders are overthinking the recent rally as the global market supply deficit will easily remain despite some of the soft data points we are seeing across Asia and Europe,” OANDA senior analyst Ed Moya said in a recent note.
“Oil is overbought, but then again so is the U.S. dollar. The oil price rally might be able to extend if optimism grows that China has found a bottom.”
On Thursday, figures from the U.S. Energy Information Administration showed U.S. crude oil stockpiles fell for the fourth consecutive week, with inventories down more than 6 per cent in the last month, Reuters reported.
Crude inventories fell by 6.3 million barrels. Analysts had expected a decline closer to 2.1 million barrels.
In other commodities, spot gold was up 0.3 per cent to US$1,924.30 per ounce by early Friday morning, but was set for a 0.7-per-cent weekly decline. U.S. gold futures rose 0.3 per cent to US$1,948.30.
The Canadian dollar was modestly higher early Friday morning while its U.S. counterpart pulled back against world currencies but was still on track for its best weekly winning streak in nine years.
The day range on the Canadian dollar was 73.03 US cents to 73.25 US cents in the early premarket period. The dollar is down about 0.56 per cent this week against the greenback.
On world markets, the U.S. dollar index, which weighs the currency against a group of world counterparts, was off 0.1 per cent at 104.93 but remained not far from the previous session’s six-month high of 105.15, according to figures from Reuters.
The index was on track to extend its gains into an eighth consecutive week, and is up 0.6 per cent so far, the news agency said.
The euro was down 0.1 per cent at US$1.0707 after touching three-month low of US$1.0686 during the previous session. The euro is on track for its eighth consecutive week of losses against the greenback.
Britain’s pound was trading at US$1.2496 and was down about 0.7 per cent for the week so far.
In bonds, the yield on the U.S. 10-year note was slightly lower at 2.42 per cent.
More company news
Rogers Communications said on Thursday it is pricing in a $3-billion bond offering to repay short-term debt and other borrowings. Rogers is selling its Canadian dollar-denominated senior bond in four parts, the telecoms company said in a statement, adding that the longest tranche of the offering, due for 2033, is priced at $1-billion of 5.9% senior bonds. In March, Canada approved Rogers’ buyout of Shaw Communications after securing binding commitments to pay financial penalties if it failed to create new jobs and invest to expand its network. -Reuters
Canadian Natural Resources Ltd, a major shipper on the Trans Mountain oil pipeline expansion (TMX), expects the project will be delayed until at least the second quarter of 2024, the company said in a letter to Canadian regulators on Thursday.Trans Mountain Corp (TMC), the Canadian government-owned corporation building the long-delayed project, has said the expanded pipeline will start shipping oil late in the first quarter of next year. Canadian Natural said it expected the pipeline’s start date to be delayed because TMC is asking regulators for a route deviation on a 1.3-km (0.8 mile) section just south of Kamloops, British Columbia. -Reuters
(8:30 a.m. ET) Canadian employment for August.
(8:30 a.m. ET) Canadian capacity utilization for Q2.
(10 a.m. ET) U.S. wholesale trade for July.
(12 p.m. ET) U.S. flow of funds from Q2.
(3 p.m. ET) U.S. consumer credit for July.
With Reuters and The Canadian Press