Morning Minutes

Canada Tapering and Employment In The Spotlight




Stock markets around the world are bouncing back this morning as some of the negative pressure of the last few days eases. US index futures are all up about 0.5%, erasing yesterday’s index losses. Overseas, the Hang Seng gained 1.9%, and the Nikkei climbed 1.25%, while in Europe, the Dax and the FTSE are both up about 0.4%. Some of the improvement in sentiment appears to be stemming from yesterday’s call between US President Biden and Chinese President Xi which investors seem have to taken as a sign that relations between the two countries have at least stopped worsening for now, with the potential for improvement.  

The Canadian Dollar has been climbing this morning, gaining 0.5% against the US Dollar. Investors have been responding favorably to yesterday’s monetary road map from Bank of Canada Governor Macklem. The Governor indicated that the central bank is planning to taper asset purchases further later this year to the point where it will just purchase enough bonds to offset natural decreases, keeping the overall balance sheet steady while it turns its focus to interest rate increases, potentially as soon as next year.

Supporting the Bank of Canada’s efforts to continue easing back on stimulus Canada added 90K jobs in August, just below the 100K street estimate and similar to July’s 94K increase. In the US, producer prices jumped 8.3%, more than the 8.2% street estimate and last month’s 7.8% indicating that inflation pressures continue to increase.

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Colin Cieszynski, Chief Market Strategist

Colin Cieszynski, CFA, CMT
Chief Market Strategist
+1 (647) 282-4428

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