Equities
Global stocks were higher and on course for a weekly gain as a rally in tech shares and rising expectations of Federal Reserve rate cuts offset investor concern about the U.S. government shutdown.
Wall Street futures pointed to a higher open. At 06:49 a.m. ET, Dow E-minis rose 0.24 per cent, S&P 500 E-minis were up 0.22 per cent, and Nasdaq 100 E-minis gained 0.24 per cent.
TSX futures were also higher. The S&P/TSX index futures contracts were up 0.42 per cent at 1,784.60 points as of 06:07 a.m. ET.
Investors have mostly shrugged off the shutdown in the U.S., which began Wednesday, even as it delayed crucial economic data, including the closely watched jobs report that was expected on Friday. Historically, shutdowns have had limited impact on economic growth and market performance.
“For now, investors remain more focused on the potential impacts of the Fed’s rate-cutting cycle, trade and immigration policy, economic data, and corporate earnings,” said Weiheng Chen, global investment strategist at J.P. Morgan Private Bank.
The lack of economic data will complicate the Federal Reserve’s decision making on interest rates, but investors have turned to private data to assess the central bank’s next moves.
Markets are becoming more confident of the Fed sticking to its rate cutting path and are almost fully pricing in a 25-basis-point rate cut in October.
Overseas, the pan-European STOXX 600 was up 0.29 per cent in early afternoon trading. Britain’s FTSE 100 rose 0.55 per cent, Germany’s DAX lost 0.15 per cent and France’s CAC 40 gained 0.04 per cent.
In Asia, Japan’s Nikkei closed 1.85 per cent higher, not far from the record high it hit last month, ahead of the crucial weekend vote that will determine the country’s next prime minister. Hong Kong’s Hang Seng closed down 0.54 per cent.
Commodities
Oil prices rose but were on course for a weekly loss of about 7-8 per cent after news of potential increases to OPEC+ supply.
Brent crude futures were up or 0.5 per cent at US$64.43 a barrel. West Texas Intermediate crude was up 0.53 per cent at US$60.80.
For the week, Brent was trading 8.1 per cent down and WTI was on course for a 7.5 per cent decline.
“We are in a wait-and-see mode for what the OPEC+ Group of Eight will decide over the weekend,” said UBS analyst Giovanni Staunovo, adding that Friday’s modest price recovery is likely to be attributable to positive risk sentiment.
In other commodities, spot gold was steady at US$3,859.69 per ounce.
Currencies and bonds
The Canadian dollar strengthened against its U.S. counterpart.
The day range on the loonie was 71.57 US cents to 71.65 US cents in early trading. The Canadian dollar was down about 0.97 per cent against the greenback over the past month.
The U.S. dollar index, which weighs the greenback against a group of currencies, lost 0.11 per cent to 97.74. The index was on course for the biggest weekly drop since August
The euro gained 0.2 per cent to US$1.1741. The British pound rose 0.07 per cent to US$1.345.
In bonds, the yield on the U.S. 10-year note was last down at 4.083 per cent.
Economic news
Japan jobless rate and services and composite PMI
Euro zone services and composite PMI
(9:30 a.m. ET) Canada’s S&P Global Services PMI for September.
With Reuters and The Canadian Press