Key facts
- Canadian S&P/TSX index futures were muted ahead of U.S. and Canadian jobs reports.
- Investors are awaiting U.S. jobs data for clarity on the labor market and its impact on Federal Reserve policy.
- Fed Governor Christopher Waller suggested holding rates steady if disinflation continues.
- Middle East tensions previously pushed up oil prices and bond yields.
- The benchmark TSX is on track for its first weekly gain in three weeks.
- Energy stocks are expected to outperform this week.
Futures tracking Canada's blue-chip stocks were subdued on Friday, as investors refrained from placing large bets ahead of crucial U.S. and Canadian jobs reports that could influence monetary policy expectations. September futures on the S&P/TSX index were muted, though trading volumes were low.
Crucial data on U.S. jobs is scheduled to be released before markets open and will provide more clarity on how the U.S. labor market is holding up. Canada will also release its jobs data. Investors will keep a close eye on the U.S. employment report as the Federal Reserve's September monetary policy meeting looms, with markets split between an interest rate hike and no move, according to LSEG data.
Bets that rates could increase this month have swung recently as U.S. inflation data painted a mixed picture, with Fed Chair Kevin Warsh not providing clear forward guidance. However, Fed Governor Christopher Waller said on Thursday that recent data showed some signs of disinflation and if the trend continued, he would favor holding rates steady at the September meeting.
Meanwhile, gold and silver prices were steady on Friday, while oil inched lower, putting mining and energy stocks in focus when markets open. Renewed strikes in the Middle East pushed up oil prices and bond yields this week, creating an uncertain backdrop for risk assets. Yields have since retreated from their recent highs.
The benchmark TSX is headed for gains this week, its first in three, with energy stocks on track to outperform peers this week. Canadian Prime Minister Mark Carney said on Thursday that his government was ready to sign a trade deal with the U.S. that benefits both countries.