Equities
Global markets lost ground as U.S. monthly jobs data came in hotter than expected, dimming hopes that the Federal reserve would follow Canadian and European central banks by cutting interest rates in September.
The American economy added 262,000 jobs in May, compared with an estimated 180,000, with the unemployment rate rising to 4 per cent
In Canada, the unemployment rate ticked up to a 28-month high of 6.2 per cent in May, matching forecasts. The economy added a net 26,700 jobs, more than the 22,500 job gain estimates.
U.S. stock indexes fell at the open on Friday, with the Dow Jones Industrial Average down 24.93 points or 0.06 per cent to 38,861.24. The S&P 500 fell 9.15 points or 0.17 per cent to 5,343.81, while the Nasdaq Composite dropped 48.99 points or 0.29 per cent to 17,124.14 at the bell.
Canada’s main stock index opened lower, weighed down by miners. The S&P/TSX composite index was down 151.83 points or 0.68 per cent at 22,077.27.
“This is a strong report, and it suggests that there are no signs of any cracks in the labour market,” Spartan Capital Securities chief economist Peter Cardillo said.
“It’s a plus for economy and a plus for corporate earnings but it’s a negative in terms of the prospects of a rate cut perhaps as early as September.”
Overseas, the pan-European STOXX 600 was 0.67 per cent lower in morning trading. Britain’s FTSE 100 declined 0.7 per cent, Germany’s DAX slid 1.14 per cent and France’s CAC 40 dropped 1.12 per cent.
In Asia, Japan’s Nikkei closed 0.05 per cent lower at 38,683.93, while Hong Kong’s Hang Seng gave back 0.6 per cent to end at 18,366.95.
Commodities
Oil ticked higher as OPEC+ members Saudi Arabia and Russia indicated readiness to pause or reverse oil output increases, but crude was still headed for its third straight weekly loss on demand concerns.
Brent crude futures edged 0.2 per cent higher to US$80.13 a barrel while U.S. West Texas Intermediate (WTI) crude futures rose 0.2 per cent to US$75.67.
“Oil prices managed to regain some ground over the past few days, tapping on some reassurances from OPEC+,” said Yeap Jun Rong, market strategist at IG.
In other commodities, gold prices fell after data showed China’s central bank paused gold purchases in May after 18 consecutive months of buying. Spot gold dropped 2.5 per cent to US$2,315.36 an ounce and U.S. gold futures slid 2.4 per cent to US$2,333.30.
Currencies and bonds
The Canadian dollar weakened against its U.S. counterpart, which surged on the payrolls numbers.
The day range on the loonie was 72.79 US cents to 73.19 US cents in the early premarket period. The Canadian dollar was down about 0.34 per cent against the greenback over the past month.
The U.S. dollar index, which weighs the greenback against a group of currencies, rose 0.5 per cent to to 104.65.
The stronger dollar put pressure on other currencies, with the euro sliding 0.5 per cent to US$1.0836 and the British pound falling 0.4 per cent to US$1.2739.
In bonds, the yield on the U.S. 10-year note advanced to 4.432 per cent ahead of the North American opening bell.
Other corporate news
GameStop has posted a decline in quarterly sales and said it would sell 75 million shares, in a surprise move ahead of a much-anticipated livestream by meme stock influencer Keith Gill on his Roaring Kitty YouTube channel.
Other economic news
(10 a.m. ET) U.S. wholesale inventories for April. Estimate is a month-over-month increase of 0.1 per cent.
(12 p.m. ET) U.S. flow of funds for Q1.
(3 p.m. ET) U.S. consumer credit for April.
With Reuters and The Canadian Press