TSX Futures Slip on US-Canada Trade War

Futures tracking Canada’s stock market slipped on Tuesday as Canada’s retaliatory tariffs on US goods took effect. The counter-tariffs cover $20 billion of US goods, with duties ranging from 15% to 50% on products including steel, furniture, clothing and electronics. The US tariffs implemented last month targeted sectors including wine, furniture, dairy products, cement, clothing, fishing rods and hockey equipment, covering $20 billion, or 5%, of Canadian exports to the US. Meanwhile, US President Trump said on Monday ?that Bombardier would ?not ?be allowed to sell its planes in the US unless it started manufacturing in the country. Also weighing on the TSX, crude prices climbed after Saudi Arabia reported attacks that halted operations at several energy facilities. Fears of prolonged energy disruptions and resulting energy-driven inflation increased rate hike expectations in Canada and the US, pressuring credit-sensitive stocks such as major banks.

The S&P/TSX Composite Index shed 0.3% to close at 36,514 on Friday following the release of Canadian and US employment data. Employment in Canada declined by 41,700 in August, missing expectations for a 15,000 increase. The weak labor data could support a more dovish stance from the BoC. However, despite keeping rates unchanged on Wednesday, Governor Macklem said policymakers were prepared to raise rates if inflation remained elevated. Meanwhile, US payrolls increased about three times the estimate, boosting expectations for a September Fed rate hike pressuring credit-sensitive stocks. Major banks posted losses, with TD Bank down 1% and Scotiabank shedding 0.9%. Gold prices declined, weighing on mining shares. Agnico Eagle lost 0.9%, Barrick shed 1.8%, and WPM retreated 0.9%. Technology stocks were mostly lower amid weakness among US hyperscalers, with Shopify edging lower and Constellation Software down 0.6%. In contrast, Celestica added 1.1%, tracking strength among chipmakers.

The S&P/TSX Composite Index edged lower to trade near 36,500 on Friday following the release of domestic and US employment data. Employment in Canada declined by 41,700 in August, missing expectations for a 15,000 increase and following a 75,100 gain in July. The weak labor data could support a more dovish stance from the BoC. However, despite keeping rates unchanged on Wednesday, Governor Macklem said policymakers were prepared to raise rates if inflation remained elevated. Meanwhile, US payrolls increased by 162,000, about three times the consensus estimate. The strong report boosted expectations for a September Fed rate hike, putting pressure on credit-sensitive stocks. Major banks traded near flat, while Brookfield fell more than 0.5%. Gold prices declined, weighing on mining shares that have supported the index in recent months. Agnico Eagle, Barrick, and WPM each shed about 2%. Oil prices also fell, pressuring energy producers, with Canadian Natural down nearly 1%.