Canada’s main stock index rose at open on Thursday led by gains in technology companies.
The Toronto Stock Exchange’s S&P/TSX Composite index was up 9.09 points, or 0.06 per cent, at 16,274.91.
In early trading, Shopify Inc. was up over 1.5 per cent, while Celestica Inc. rose over 1 per cent.
Canadian dollar edged lower against its U.S. counterpart on Thursday as the greenback broadly climbed and after Italy added to Canada’s uncertain trade outlook, saying it will not ratify the European Union’s free trade accord with the country.
The free trade agreement with Canada does not ensure sufficient protection for Italy’s specialty foods, new Agriculture Minister Gian Marco Centinaio said in a newspaper interview.
Canada is also contending with new U.S. tariffs on steel and aluminum imports as well as slow-moving talks to modernize the North American Free Trade Agreement.
The U.S. dollar rose against a basket of major currencies after a signal by the European Central Bank that it would keep interest rates at record lows through the summer of 2019 weighed on the euro.
Gains for the greenback came as U.S. data showing the strongest rise in retail sales in six months supported expectations that the Federal Reserve would raise interest rates further.
The Canadian dollar traded 0.1 per cent lower at $1.3004 to the greenback, or 76.90 U.S. cents. The currency traded in a range of $1.2950 to $1.3012.
On Wednesday, the loonie touched its weakest in more than one week at $1.3052.
U.S. stocks opened higher on Thursday on better-than-expected May retail sales data, while investors assessed the European Central Bank’s move to end its stimulus program and the U.S. Federal Reserve’s guidance on monetary policy.
The Dow Jones Industrial Average rose 53.45 points, or 0.21 per cent, at the open to 25,254.65. The S&P 500 opened higher by 7.58 points, or 0.27 per cent, at 2,783.21. The Nasdaq Composite gained 27.84 points, or 0.36 per cent, to 7,723.53 at the opening bell.
The Fed raised its benchmark interest rates by 25 basis points for the second time this year on Wednesday and hinted at two more hikes by the end of 2018.
Traders are pricing in a 53-per-cent chance that the Fed will raise rates for a fourth time this year in December, according to the CME group’s Fedwatch tool.
The ECB took its biggest step in dismantling crisis-era stimulus by the close of the year, but the central bank also said that interest rates would stay at record lows at least through the summer of 2019.
“There’s some concern that we’re going to see a lot tighter policy. But both the Fed and the ECB, especially, are very accommodative at this point and it doesn’t look like it’s going to derail the expansion that we’re seeing anytime soon,” said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.
Data on Thursday showed U.S. retail sales increased more than expected in May, the latest indication of an acceleration in economic growth in the second quarter.
Trade tensions simmered, with President Donald Trump due to unveil tariffs targeting $50 billion of Chinese goods on Friday. An official said Trump would meet with his top trade advisers on Thursday to decide whether to activate threatened tariffs.
The pan-European STOXX 600 index raced back into positive territory after a morning in the red, though basic resources stocks stayed down more than 1 per cent after weak data from big metals consumer China.
Germany’s DAX and France’s CAC40 led the stocks rebound, while the euro tumbled back towards $1.17 from well over $1.18 . Euro zone government borrowing costs slid too as traders recalibrated prices for a longer period of sub-zero ECB rates.
“The Governing Council expects the key ECB interest rates to remain at their present levels at least through the summer of 2019 and in any case for as long as necessary (to get inflation back to near 2 percent),” the ECB said.
Germany’s Bunds were offering 0.46 per cent compared with 0.49 per cent before the ECB statement.
U.S. Treasuries meanwhile were down to 2.94 percent having briefly topped 3 per cent overnight after the Federal Reserve had pushed up its interest rates..
“I think its pragmatic for the Fed to take these moves, because if you are not going to make them now, when are you going to take them?” Kully Samra, European managing director at $3 trillion U.S. asset manager Charles Schwab, said.
The ECB had probably been too slow to reduce stimulus, Samra added, though recent weaker data showed Europe still had underlying issues.
Oil prices steadied on Thursday, but still faced pressure from evidence of rising U.S. output and uncertainty over the outlook for supply before a meeting next week of the world’s largest exporters.
Benchmark Brent crude oil was up 10 cents at $76.84 a barrel, while U.S. light crude was 45 cents higher at $67.09.
Brent hit a high of $80 a barrel in May but has since drifted lower, indicating investors expect the market to become better supplied in the next few months as U.S. crude production rises and as key Middle East exporters and Russia pump more.
U.S. crude output has risen almost 30 per cent in the last two years to a record high of 10.9 million bpd. Russia pumped 11.1 million bpd in the first two weeks of June, above Saudi Arabia, which produced slightly more than 10 million bpd.
The Organization of the Petroleum Exporting Countries and other big producers meet on June 22-23 in Vienna to discuss production and are widely expected to agree to higher output.
“A wait-and-see approach is taking hold across the energy complex as market participants buckle down ahead of next week’s crunch OPEC/non-OPEC meeting,” said Stephen Brennock, analyst at London brokerage PVM Oil Associates.
The surge in U.S. output has put pressure on other producers, which are losing market share.
Russian and Saudi production has been held back voluntarily since 2017, when OPEC, together with a number of other producers, began supply cuts of 1.8 million bpd to prop up prices.
But, with Brent prices up by around 180 percent from their 2016 lows and demand strong, OPEC and Russia may soon end their supply cuts.