Morning Minutes

World Markets Digest Economic News Ahead of Friday Employment Numbers




Trading across global equity markets has been flat to moderately lower this morning. In the US, the three main index futures contracts are hovering between -0.1% and +0.1%. Major European indices are down across the board, including losses of 0.3% for the Dax and 0.6% for the FTSE.

Economic news and its potential impact on monetary policy continues to weigh on investor sentiment around the world. Yesterday the Bank of Canada announced what could be considered a “hawkish hold”, pausing interest rate hikes but continuing Quantitative Tightening and indicating that it is prepared to resume interest rate increases if needed.

Investors also learned overnight that while inflation coming down may be seen as a positive for equities, inflation falling too fast could be seen as a negative sign of a sputtering economy. Overnight, China’s Consumer price (1.0% vs street 1.9%) and Producer price (-1.4% vs street -1.3%) inflation numbers came in lower than expected suggesting that it’s economy may not be rebounding as fast as had possibly been hoped.

In North America today, employment remains the main focus with weekly jobless claims climbing back up above 200K for the first time in eight weeks (211K vs street 195K). This miss may partly offset yesterday’s positive ADP payrolls report heading into tomorrow’s big numbers. US Nonfarm Payrolls (street 203K vs previous 517K), and Canadian job growth (street 10K vs previous 150K) are due at 8:30 am Friday along with wage inflation reports for the US (street 4.8% vs previous 4.4%) and Canada (previous 4.5%) which could indicate how much pressure North American central banks are under to remain hawkish.

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Colin Cieszynski, Chief Market Strategist

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

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