Canada’s main stock exchange opened higher on Thursday as energy stocks jumped with oil prices.
The S&P/TSX composite index was up 54.24 points, or 0.34 per cent, to 16,226.75 in early trading.
Cameco Corp. shares jumped 21.3 per cent in early trading after the Tax Court of Canada ruled in its favour over a dispute on the reassessments the Canada Revenue Agency (CRA) issued.
The Canadian dollar weakened to its lowest in more than two weeks against its advancing U.S. counterpart on Thursday after U.S. President Donald Trump blasted Canada over the slow pace of talks over the NAFTA trade deal.
Trump said on Wednesday he was unhappy he had rejected Canadian Prime Minister Justin Trudeau’s request for a one-on-one meeting and repeated a threat to impose tariffs on Canadian autos. Trudeau spokeswoman Chantal Gagnon said: “No meeting was requested. We don’t have any comment beyond that.”
The U.S. dollar also climbed against a basket of six major currencies one day after the U.S. Federal Reserve raised interest rates for the third time this year, and as the euro was weighed down by media reports that an Italian budget meeting was likely to be delayed.
The Bank of Canada has also been raising rates this year. Its governor, Stephen Poloz, could provide clues on prospects of another hike in October when he speaks later today. The central bank will release his prepared remarks at 5:45 p.m.
The Canadian dollar was trading 0.4 per cent lower at $1.3069 to the greenback, or 76.52 U.S. cents. It touched its weakest since Sept. 11 at $1.3083.
The price of oil, one of Canada’s major exports, was supported by the prospect of a shortfall in global supply once U.S. sanctions against major crude exporter Iran come into force in just five weeks’ time.
U.S. stocks opened higher on Thursday, boosted by gains in shares of high-flying companies such as Apple and Amazon, and as the Federal Reserve ended an era of “accommodative” monetary policy.
The Dow Jones Industrial Average rose 32.99 points, or 0.13 per cent, at the open to 26,418.27.
The S&P 500 opened higher by 5.68 points, or 0.20 per cent, at 2,911.65. The Nasdaq Composite gained 30.86 points, or 0.39 per cent, to 8,021.22 at the opening bell.
The Fed, as expected, raised interest rates on Wednesday, and left its monetary policy outlook for the coming years largely unchanged amid steady economic growth and a strong job market, adding it did not expect any surprises on inflation.
Wall Street initially rose after the statement on Wednesday, but pulled back to close lower.
“We had a good flush in the last few hours of yesterday, so today we are going to catch a little bit of a bounce,” said Art Hogan, chief market strategist at B. Riley FBR in New York.
“The FAANG group hasn’t done a whole lot in the past two weeks but go down, and now that we’re on the other side of the Fed decision, perhaps they can catch a bit of a relief rally.”
Shares of Apple rose 1.7 per cent in early trading after JP Morgan started coverage with an “overweight” rating, citing the iPhone maker’s quicker-than-expected move to a services business.
Amazon rose 1.1 percent after brokerage Stifel talked up the company’s retail, cloud, and advertising businesses, even as the online retailer was set to open a brick-and-mortar store in New York City.
The other so-called FAANG stocks - Facebook, Netflix and Google-parent Alphabet - were also trading higher.
U.S. economic growth accelerated in the second quarter at its fastest pace in nearly four years as previously estimated, putting the economy on track to hit the Trump administration’s goal of 3 percent annual growth.
Europe’s share markets and the euro both took a tumble on Thursday as reports that Italy’s long-awaited budget was facing a delay compounded an already groggy global mood after the third U.S. interest rate rise of the year.
Italy’s main Milan bourse slumped as much as 2 per cent with the country’s big banks down even more as the country’s borrowing costs also hit a three-week high in the government bond markets.
Investors have been anxious about Italy’s budget which some fear could lead to a blowout of the country’s deficit, and put the coalition government on a collision course with the European Union.
Rome confirmed that a cabinet meeting over budget targets was still planned for later, dismissing an earlier report in the Corriere della Sera newspaper that it could be delayed.
But it couldn’t soothe the markets, especially after the economy ministry was forced to deny its chief Giovanni Tria, an academic who doesn’t belong to any one party, had threatened to resign.
“It is very fluid and it is changing by the minute it seems,” head of EMEA macro strategy at State Street Tim Graf said.
“Even if things get resolved positively today, Italy is not a situation that is going to go away,” he added, pointing to the growing popularity of the country’s fractious anti-establishment coalition government.
The strains weighed on the rest of Europe too, with the STOXX 600 still in the red despite an attempted rebound and the euro down 0.25 per cent in the currency markets having skidded all the way down to $1.17.
That fall also gave the dollar a boost after it had only managed a lazy gain after the Federal Reserve hiked U.S. interest rates on Wednesday by another 25 basis points to a range of 2 per cent to 2.25 per cent.
The dollar index which measures the greenback against a basket of currencies, was last up 0.4 per cent to 94.529.
The index had scaled a 13-month high in mid-August, drawing safe-haven demand as trade tensions buffeted riskier emerging market currencies. The index has since fallen about 2.8 percent though as investors have become more nuanced in their views.
Fed ratesetters still see another rate hike in December, three more next year, and one increase in 2020.
The Australian dollar seen as a barometer of global investor risk appetite and Chinese demand, fell 0.4 percent to $0.7226, its lowest since Sept. 19 and not far off its 2-1/2 year lows of $0.7085 hit earlier this month.
Overnight, MSCI’s index of Asia-Pacific shares outside Japan had ended lower. There were, however, pockets of resilience such as South Korea’s Kospi, which hit three-month highs, as it resumed trade after a three-day public holiday.
Japan’s Nikkei briefly touched an eight-month high too as signs that the United States may not impose further tariffs on Japanese automotive products for now lifted carmakers, though the index eventually ended down 1 per cent.
Rising oil prices are another major pressure point for energy importers and they gained again ahead of U.S. sanctions coming into force on Iranian exports due in November.
Global benchmark Brent was 0.7 per cent at $81.88 per barrel, near the four-year high of $82.55 set on Tuesday. West Texas Intermediate (WTI) crude futures gained 1 per cent to $72.34 a barrel.
“The real big impact is the fuel price...that is what is really worrying me,” Philippines finance minister Carlos Dominguez told Reuters.
Reuters