Source: The Canadian Press
The Toronto stock market headed for a positive open Tuesday as U.S. dollar weakness pushed up prices for oil and copper while gold moved further into record territory on European government debt worries.
The weaker greenback sent the Canadian dollar above parity with the American currency, up 0.4 of a cent to 100.03 cents US.
U.S. futures pointed to a positive session with the Dow Jones futures up 25 points to 11,387, the Nasdaq futures gained 10 points to 2,194 while the S&P 500 futures climbed 3.4 points to 1,223.
Tensions over currencies and trade gaps are simmering ahead of the G20 meeting Thursday and Friday amid a U.S. move to flood its sluggish economy with US$600 billion of cash.
Emerging economies in particular are worried that the Fed move will further weaken the greenback and give an advantage to cheaper American exports.
At the same time, China has maintained tight control over its currency, the yuan, adding to criticism it is kept artificially low and gives Chinese exporters an unfair export advantage.
Markets are also focused on Europe’s ongoing debt problems and Ireland’s ability to get its public finances in shape.
The growing worry in the markets is that Ireland’s government may not be able to pass another bout of austerity measures on Dec. 7th, and that as a result it will have to seek financial assistance from its partners in the eurozone and the International Monetary Fund, as Greece had to earlier this year. That conclusion is clear from what’s going on in bond markets with the spread between Irish and German ten-year yields seemingly rising to record highs on a daily basis.
Gold prices added to Monday’s record close with the December bullion contract on the New York Mercantile Exchange up $15.80 to US$1,419 an ounce as investors look to the precious metal as a safe haven.
The December crude contract on the Nymex climbed 40 cents to US$87.46 a barrel while the December copper contract rose seven cents to US$4.02 a pound.
Overseas, Japan’s Nikkei 225 stock average closed down 0.4%, Hong Kong’s Hang Seng lost 1% to 24,710.60 and Australia’s S&P/ASX 200 shed 0.8% to 4,740.7.
China’s benchmark Shanghai Composite Index lost 0.8% amid caution over possible monetary policy moves to curb excess liquidity.
London’s FTSE 100 index rose 0.77%, Frankfurt’s DAX gained 0.7% while the Paris CAC 40 is up 0.73%.
Sentiment in Europe as helped after British mobile phone company Vodafone reported a 3% rise in half-year operating profits to 6.1 billion pounds and raised its guidance for full-year profits following after higher than expected revenues growth around the world.
Swiss recruitment agency Adecco SA reported a bigger than anticipated 42% rise in third-quarter profits. French luxury goods maker Hermes SA also impressed after it raised its full-year revenue forecasts following a third-quarter rebound.
In Canadian earnings news, information technology company CGI Group Inc. (TSX:GIB.A) said fourth quarter earnings grew 1.7% to $84.1 million on the back of stronger revenues.
Technology licensing company Wi-LAN Inc. (TSX:WIN) reported a third-quarter loss of $6.2 million compared to a profit of $16.5 million in the comparable period a year earlier. Revenues increased 24% to $11.3 million.