TSX higher as Canadian, U.S. labor market data looms large

Investing.com - Canada’s main stock exchange ended higher on Thursday, after a rally in technology and metal mining names pushed the index to a fresh all-time peak in the prior session.

By 12.05, the S&P/TSX 60 index standard futures contract had risen by 10 points, or 0.59%.

The S&P/TSX composite index gained 164 points or 0.57% at 28,915.89.. 

Investors pored through weaker-than-expected U.S. private payrolls data and turned their focus to a key upcoming jobs report.

A gauge of private-sector hiring increased by 54,000 jobs in August, less than economists’ forecasts of 73,000 and down from a slightly upwardly-revised mark of 106,000 in July. Weekly first-time claims for unemployment benefits also came in at 237,000, above projections and not far from the prior total.

The numbers did little to derail expectations that the Federal Reserve will slash interest rates later this month, with the CME’s FedWatch Tool showing that a more than 97% chance of a 25-basis point reduction at the central bank’s September 16-17 gathering.

Much of the attention in markets now shifts to Friday, when all-important U.S. nonfarm payrolls figures for August are anticipated to be released. Economists expect the U.S. to have added 75,000 roles during the month, compared to 73,000 in July

Index last closed up by 135.74 points, or 0.5%, at 28,751.36, notching a new record high previously set on Tuesday.

A surge in the price of gold to its own record high underpinned a climb in the TSX’s materials group, which includes shares of materials mining companies. Tech stocks also advanced by 1.4%.

The upticks helped to offset weakness in the energy sector dragged down by a slide in oil prices.

Investors are now looking ahead to the monthly employment data from Canada. Canada’s figures are seen as particularly crucial for the country’s central bank, which is set to unveil its latest interest rate decision on September 17. Markets are currently pricing in around a 60% probability that the Bank of Canada slashes rates by 25 basis points.

U.S. stocks up

S&P 500 and Nasdaq edged higher as global bond markets stabilized after a bout of selling earlier in the week and investors turned their focus to the upcoming payrolls data.

At 4:00 p.m. ET, the benchmark S&P 500 rose 0.8% to a record close of 6,501.44. The tech-heavy NASDAQ Composite closed 1% higher. The blue-chip Dow Jones Industrial Average, meanwhile, gained 0.8%, 350 points. 

Bond markets were calmed by comments from several Federal Reserve officials, including Governor Christopher Waller, which further bolstered wagers that the central bank will resume slashing interest rates at its next meeting later this month.

Meanwhile, an auction of longer-dated Japanese government debt saw tepid demand, but takeup was still enough to prevent fresh anxiety from gripping bond markets. The country’s 30-year bond yield had earlier spiked to an all-time peak. Yields tend to move inversely to prices.

On Wednesday, the benchmark S&P 500 and tech-heavy Nasdaq Composite both ended in the green, boosted by a jump in shares in Alphabet following a court ruling which spared the Google owner from having to break up its sweeping operations.

A judge on Tuesday allowed Google to keep control of its popular Chrome browser and Android operating system, but barred it from securing some exclusive contracts. Still, the decision spared a lucrative payments deal between Google and Apple, spurring on a rally in the iPhone-maker’s shares.

Gold slips

Gold prices fell on Thursday, facing some profit-taking after the yellow metal touched recent record highs, while the dollar steadied ahead of more cues on the U.S. labor market and interest rate cuts.

Spot gold slipped by 0.6% to $3,539.87/oz, while gold futures for December declined 1.0% to $3,598.10/oz by 07:30 ET.

Bullion hit a series of all-time peaks this week, amid growing conviction that the Federal Reserve will cut interest rates at its September 16-17 gathering. Fed funds futures indicated markets were pricing in a nearly 100% chance the central bank will cut rates by 25 basis points during its September 16-17 meeting, CME’s FedWatch Tool showed.

Lower rates tend to benefit non-yielding assets such as gold, given that they lower the opportunity cost of investing in the metal.

Oil ticks lower

Oil prices dipped in mid-morning European trading on Thursday, extending losses from the prior session after reports suggested that the OPEC+ was considering another output hike at an upcoming meeting.

Markets were also pressured by industry data pointing to a weekly increase in U.S. oil inventories, which exacerbated concerns over a post-summer cooldown in American fuel demand. 

Brent oil futures for November fell 0.81% to $67.05 a barrel, while West Texas Intermediate crude futures slipped 1.0% to $63.34 a barrel by 12.05 ET.