Canada’s main stock index fell at open on Friday after domestic data showed a surprise fall in jobs in August and as trade and tariff worries continued to weigh.
The Toronto Stock Exchange’s S&P/TSX composite index was down 72 points, or 0.45 per cent, at 16,028.94.
The Canadian dollar weakened against its U.S. counterpart on Friday, pressured by domestic data showing that the economy unexpectedly shed jobs in August.
Canada’s economy lost 51,600 jobs in August after two months of gains, with losses in part-time work overtaking gains in full-time employment, Statistics Canada said. Analysts surveyed by Reuters had expected the economy to add 5,000 jobs.
Chances of a Bank of Canada interest rate hike in October were little changed following the release of the data, at about 60 per cent, the overnight index swaps market indicated.
The Canadian dollar was trading 0.1 per cent lower at $1.3163 to the greenback, or 75.97 U.S. cents. The currency traded in a range of $1.3111 to $1.3183.
On Thursday, the loonie got a boost after Bank of Canada Senior Deputy Governor Carolyn Wilkins said in a speech that the central bank had discussed dropping its gradual approach to raising rates.
U.S. stock indexes opened lower on Friday, as strong jobs data highlighted tightening labor market conditions and cemented expectations for the Federal Reserve increasing interest rates.
The Dow Jones Industrial Average fell 44.85 points, or 0.17 per cent, at the open to 25,951.02.
The S&P 500 opened lower by 9.79 points, or 0.34 per cent, at 2,868.26. The Nasdaq Composite dropped 43.94 points, or 0.55 per cent, to 7,878.79 at the opening bell.
U.S. job growth accelerated in August, with wages notching their largest annual increase in nine years, the Labor Department said, strengthening views the economy was so far weathering the Trump administration’s escalating trade war with China.
“Futures are down a little bit, it could be on wages for those who are afraid of rate hikes, it certainly reinforces that September is almost definite and makes the December probability a little bit higher,” said JJ Kinahan, chief market strategist at TD Ameritrade in Chicago.
Traders of U.S. short-term interest-rate futures kept their bets of two more rate hikes this year, with a further hike expected in June of 2019. The probability of a second 2019 rate hike increased, but was still below 50 per cent.
Investors also prepared for a fresh salvo of Sino-U.S. tariffs as public comment period for proposed U.S. tariffs on an additional $200 billion worth of Chinese imports passed at midnight ET. The tariffs could now go into effect at any moment, although there was no clear timetable, and Beijing has said it would retaliate.
According to CNBC, President Donald Trump hinted to a Wall Street Journal columnist that he might next take up trade issues with Japan. This as U.S.-Canada talks on a North American Free Trade Agreement deal still face a few stubborn issues.
“Seems like investors are following the recent trend of downward bias with focus primarily on trade concerns. It’s a wait and watch game right now,” said Andre Bakhos, managing director at New Vines Capital LLC in Bernardsville, New Jersey.
Shares of social media stocks weakened for the third session in a row in early trading on concerns of increased regulations. Facebook dropped 0.8 per cent, Alphabet was off 0.9 per cent, Snapchat-parent Snap Inc fell 0.7 per cent and Twitter declined 1.8 per cent.
After steep declines on Thursday, chip stocks looked to get a breather based on encouraging reports from Broadcom and Marvell Technology.
Reuters