By Ketki Saxena
Investing.com -- At 10:00 a.m in Toronto, the S&P/TSX Composite index was at 20,356.90 points, down 1.01% shortly after the bell, as markets reacted to hotter than expected U.S. inflation reading and an exceptionally strong Canadian jobs report. The indicators reinforce the likelihood of aggressive monetary policy tightening on both sides of the border.
U.S. consumer prices increased 8.6% after rising 8.3% in April, on a year-over-year basis, suggesting the Federal Reserve could continue with its 50 basis points interest rate hikes straight through to September.
Strength in the Canadian labour market, with unemployment falling to 5.1% from 5.2% a month earlier, also reinforced the case for aggressive rate hikes in Canada. Following yesterday’s financial review, Bank of Canada Governor Tiff Macklem also confirmed the may need to raise its benchmark interest rate to 3% or above to tackle inflation. The comments echoed similar remarks by deputy governor Paul Beaudry last week.
Losses on Canada’s commodity heavy benchmark index were also exacerbated by weakness in commodities including crude following news of new Covid-19 restrictions in Shanghai.
Here’s a snapshot of markets at the open:
Indices:
- S&P/TSX 60: -0.87%
- S&P/TSX Venture Composite: -1.51%
- S&P500: -1.62%
- Dow Jones: -1.65%
- Nasdaq: -1.70%
- VIX (wall street fear guage): +5.83%
Commodity Futures:
- Crude: -0.76% at $120.59
- Brent: -0.76% at $122.01
- Natural Gas: -2.99% at $8.659%
- Gold: -1.12% at $1832.00
- Silver: -1.96% at $21.390
- Copper: -1.76% at $4.304
Bonds and Currencies
- Canada 5 year: +0.091 points at 3.253%
- Canada 10 year: +0.057 points at 3.290%
- United States 10-Year: +0.069 points at 3.111%
- US Dollar Index Futures: +0.76% at 104.00
- USD/CAD: +0.67% at 1.2780
Cryptocurrrencies: