Commodities drop as US dollar gains, TSX closes lower
The strengthening greenback impacted commodity prices Monday while analysts reigned in concern over the reduced supply of oil from Alberta on lack of definitive data on the scale of the wildfire damage.
Equities were hit by the lower prices for oil and gold and the main index of the Toronto Stock Exchange closed 1 per cent lower.
Wall Street closed mixed with the Dow lower but the S&P and Nasdaq managing slim gains.
Asian markets closed mixed with Japan’s Nikkei helped by the weaker yen against the dollar but China’s equities declined on weak trade data. There were also mixed fortunes for European markets.
The S&P/TSX Composite Index closed down 137.6 (1.00 per cent)
The Dow Jones closed down 34.72 (0.20 per cent)
Oil is trending lower (Brent $43.56, WTI $43.32 at 4.55pm)
Gold is trending lower (1265.10 at 4.55pm)
The loonie is valued at U$0.7710
IMF says BoC policy is working but further rate cut may be needed
The International Monetary Fund reported Monday that the interest rate cut made by the BoC last year, together with the lower Canadian dollar, have helped offset the impact of the oil price rout.
However, the IMF also said that the central bank should consider using a further interest rate cut if necessary or some less usual fiscal moves.
Currently, the IMF believes that the current level of stimulus is sufficient despite growth facing challenges from oil and the global economy. The latest expectation is for 1.75 per cent growth for 2016, rising to 2.25 per cent in 2017.
National Bank spreads international investment
National Bank has doubled its stake in Cambodia’s ABA Bank, continuing its aim to spread its international investment as domestic revenue becomes harder to come by. The fast-growing ABA is seen by analysts as a good investment set for a yield of 18 per cent in the 2017 fiscal year. However, CIBC World Market’s economist Robert Sedran wrote: “Realizing that potential when it is on the other side of the world – literally and figuratively – will require strong execution and probably a little luck.”