Oil Surge Drives Canadian Markets Amid Fed Rate Hopes
Canada's economic calendar is relatively quiet on Friday, but market participants will be keeping an eye on developments in the US. The August consumer price index data release at 8:30 a.m. Eastern could determine whether the Federal Reserve raises interest rates next week.
The University of Michigan is also publishing its preliminary September consumer sentiment index at 10 a.m., and investors will pay particular attention to households' inflation expectations as rising fuel costs strain confidence and spending power.
Meanwhile, oil prices remain a key driver for Canadian markets. Brent crude surged more than 6% yesterday to settle at US$107.63 a barrel, the highest level since mid-May. This is amid intensifying attacks on Middle East shipping routes, while the U.S. 10-year Treasury yield approached 5%. Higher crude prices may support Canadian energy stocks and the loonie, but they also increase inflation and interest rate risks.