TSX Slumps on US Hiring Surge as Fed Hike Odds Rise
The TSX Composite Index fell by 0.33% on Friday to close at 36,513.80, capping off a week of losses. The decline in the Canadian equities market came despite a strong American employment report.
The US added 162,000 jobs in August, surpassing forecasts and keeping the unemployment rate steady at 4.1%. This data has bolstered the case for the Federal Reserve to raise borrowing costs again this month.
In contrast, Canada's economy shed 41,700 jobs in August, a sharp reversal from earlier hiring. The unemployment rate remained at 6.4%.
The divergence in labor-market performance created a split-screen effect across financial markets, with US Treasury yields climbing and Canada's benchmark 10-year government bond yield slipping 2.2 basis points to 3.775%. Meanwhile, the comparable US 10-year yield rose to 4.7862%.
Mike Archibald, portfolio manager at AGF Investments, said that the strong US jobs data 'just reaffirms this idea that the U.S. economy is still in a very good position.'