Equities in Canada’s largest market opened higher on Thursday as an unexpected fall in U.S. inflation raised hopes that the Federal Reserve would start its easing cycle as soon as September.
The TSX Composite Index picked up Thursday from where it left off Wednesday, charging ahead 106.09 points to 22,456.32.
The Canadian dollar inched higher 0.09 cents to 73.52 cents U.S.
In Canada, the 29-month rise in domestic unemployment numbers has amplified calls for another rate cut by the Bank of Canada in its next policy meeting on July 24.
In corporate news, International Battery Metals became the first company to produce lithium with a novel type of filtration technology commercially. International Battery Metals shares took flight 25 cents, or 22.5%, to $1.36.
ON BAYSTREET
The TSX Venture Exchange nicked up 2.09 points to 585.35.
All but one of the 12 TSX subgroups made gains in Thursday’s first hour, with real-estate hiking 1.5%, consumer discretionary stocks better by 1.2%, and communications ahead 1.1%.
Only consumer staples proved less than positive, barely clearing breakeven.
ON WALLSTREET
Stocks were little changed after the new data showed the inflation rate fell to its lowest level in more than three years in June, bolstering the case for the Federal Reserve to cut rates later this year.
The Dow Jones Industrials captured another 152.98 points to open Thursday at 39,874.34.
The S&P 500 index lopped off 4.3 points to 5,629.61, threatening its seven-session win streak.
The NASDAQ dropped 98.34 points to 18,549.11, from Wednesday’s all-time high.
The consumer price index fell 0.1% last month from May, bringing the annual inflation rate down to 3%. Economists surveyed by Dow Jones had expected a 0.1% monthly increase and a 3.1% annual rate. Core CPI, which excludes food and energy, came in at a 3.3% annual rate, also lower than economists expected.
Odds of a September rate cut rose to greater than 80% based on fed funds futures trading following the CPI data. Traders still see the Fed standing pat at its meeting later this month.
Nvidia led chip stocks higher in the premarket as investors jumped back into bull market winners following the better-than-expected inflation reading. Housing-related shares such as Home Depot and D.R. Horton jumped on the hope lower rates would reignite a stalling housing market.
Prices for the 10-year Treasury jumped, lowering yields to 4.17% from Wednesday’s 4.28%. Treasury prices and yields move in opposite directions.
Oil prices retreated 29 cents at $81.81 U.S. a barrel.
Gold prices spiked $33.90 to $2,413.60
