News Column

Stocks to head up amid strong U.S. jobs data, weak Canadian employment report

June 6, 2014

Malcolm Morrison, The Canadian Press

TORONTO - North American stock markets were set for a higher open in the wake of a solid U.S. employment report for May.

However, the Canadian dollar was lower as job creation figures for Canada came in above expectations, up 25,800 for the month. But Statistics Canada said the gains were part-time and the unemployment rate edged up to seven per cent from 6.9 per cent as more Canadians went looking for work in May. The loonie dipped 0.03 of a cent to 91.47 cents US.

U.S. futures were higher as the Labor Department said the American economy cranked out 217,000 jobs, roughly in line with expectations. That’s down from 282,000 in April, which was revised slightly lower. Despite the gains, the unemployment rate remained 6.3 per cent.

The Dow Jones industrial futures gained 49 points to 16,867, the Nasdaq futures climbed 9.2 points to 3,785.5 and the S&P 500 futures were ahead 4.5 points to 1,943.

The TSX could find some lift from the energy sector as the Financial Times reported that EU officials have decided to change a draft of a fuel quality directive, something Canadian officials have lobbied their European counterparts to do. Proposed EU environmental legislation would have set heavy penalties on petroleum products made from Alberta’s oilsands, citing higher carbon emissions associated with its production.

There has been speculation in Ottawa that the crisis between Russia and Ukraine may have helped Canada’s cause.

Prime Minister Stephen Harper has suggested that Europe should reduce its dependence on Russian energy supplies and look to Canada for some of its energy.

In other economic news, German industrial production edged up by a smaller-than-expected 0.2 per cent in April compared with the previous month, even as factory orders in Europe’s biggest economy strengthened. The figure was below economists’ expectations of a rise by 0.3 per cent or more.

Meanwhile, traders looked ahead to a raft of key Chinese data coming out next week including readings on inflation, trade and retail sales.

Ahead of those reports, The World Bank and the International Monetary Fund are urging China to focus on controlling risks from rapidly rising debt due to its reliance on credit-fuelled growth. The comments add to warnings by private sector analysts that China’s run-up in debt, especially since the 2008 global crisis, could lead to financial problems and disrupt economic growth that already is slowing.

Commodity markets were mixed in the wake of the jobs data with July crude in New York49 cents higher to US$102.97 a barrel.

August bullion gained $2.30 to US$1,255.60 an ounce, while July copper fell five cents to US$3.04 a pound.

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Source: Canadian Press DataFile

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