Canada’s main stock index opened higher on Friday led by gains in consumer discretionary stocks after data showed the country’s retail sales for March rose by the most in five months.
The Toronto Stock Exchange’s S&P/TSX composite index was up 6.44 points, or 0.04 per cent, at 16,149.99.
The Canadian dollar weakened against its U.S. counterpart on Friday after weaker-than-expected domestic inflation dampened prospects of another Bank of Canada interest rate hike as early as this month.
Canada’s annual inflation rate cooled modestly to 2.2 per cent in April, short of economist expectations for 2.3 per cent, as consumers paid less for travel services and gasoline prices moderated, data from Statistics Canada showed.
Still, two out of three of the central bank’s core inflation measures rose and separate data showed that Canadian retail sales rose by the most in five months.
It fits with the Bank of Canada’s view that it is going to have to raise interest rates further but “inflation isn’t really pushing them to do it in a really fast way that would destabilize the household sector,” said Nathan Janzen, senior economist at Royal Bank of Canada.
The central bank has raised its benchmark interest rate three times since July to leave it at 1.25 per cent. Chances of another hike at the May 30 announcement sank to 35 per cent from nearly 50 per cent before the data.
The Canadian dollar was trading 0.7 per cent lower at $1.2896 to the greenback, or 77.54 U.S. cents. The currency touched its weakest since Tuesday at $1.2909.
U.S. stocks opened slightly lower on Friday due to losses in technology stocks including Applied Materials and Alphabet, while investors kept a close watch on U.S.-China trade talks.
The Dow Jones Industrial Average fell 6.26 points, or 0.03 per cent, at the open to 24,707.72.
The S&P 500 opened lower by 2.78 points, or 0.10 per cent, at 2,717.35. The Nasdaq Composite dropped 18.14 points, or 0.25 per cent, to 7,364.34 at the opening bell.
China denied it had offered to cut its trade surplus with the United States by up to $200 billion, hours after it dropped an anti-dumping probe into U.S. sorghum imports, but added that talks were constructive.
The world’s two biggest economies are seeking to bridge a divide on trade issues during the two-day talks in Washington that began on Thursday.
“The focus today will be on trade talks as China denied any major reductions in surplus and the NAFTA talks progression” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
Among technology stocks, Alphabet fell 0.9 per cent in early trading and is expected to weigh on the major indexes.
Applied Materials dropped 8 per cent after the chip gear maker’s disappointing forecast renewed concerns over slowing smartphone demand.
Campbell Soup declined 11.2 per cent after the company cut its full-year earnings forecast and said Chief Executive Officer Denise Morrison would step down.
Investors have been fretting about rising interest rates, with the 10-year Treasury yield, the benchmark for global borrowing costs, holding above the key 3-per-cent level for the fourth day.
Tractor maker Deere reported a rise in quarterly sales, but profits were dragged down by higher freight and material costs. Its shares were up 0.1 per cent.
The company’s results reflect concerns of big U.S. manufacturers, which have warned of higher raw material costs amid a surge in commodity prices and rising interest rates.
Oil prices continued their surge, with Brent crude on track for the sixth straight week of gains, boosted by strong demand, looming sanctions on Iran, plummeting Venezuelan production and Nigerian disruptions.
Nordstrom declined 7.7 per cent after the upscale department store operator reported same-store sales that missed analysts’ estimates.