TORONTO – The Toronto stock market appeared headed for a positive start, as traders took in a move by the European Central Bank to cut its benchmark interest rate to a record low and awaited a private sector jobs report from the U.S.
The Canadian dollar was up 0.04 of a cent to 91.88 cents US, ahead of U.S. payroll processor ADP releasing Thursday how many jobs were added by private sector American employers in August. Statistics Canada and the U.S. Bureau of Labor Statistics both release their jobs reports on Friday.
U.S. futures were positive with the Dow Jones industrial futures up 40 points to 17,078, the Nasdaq futures were up eight points to 4,070.96, and the S&P futures were up 6.5 points to 2000.72.
The European Central Bank lowered its benchmark interest rate further to 0.05 per cent from a previous record low of 0.15 per cent. The move is an attempt by the central bank to keep Europe’s weak recovery from going into reverse. The benchmark refinancing rate determines what banks pay the ECB for credit. It influences what banks charge businesses and consumers to borrow. Lower rates are expected to stimulate more lending and growth.
Markets were awaiting a news conference by European Central Bank head Mario Draghi for clues on what more the bank might do. Draghi has said the bank could buy large quantities of bonds if needed.
Meanwhile, the Bank of England said Thursday it will keep its main interest rate at a record low 0.5 per cent, even as Britain’s economy is recovering at a healthy pace. Policy makers also voted not to pump more money into Europe’s third-largest economy.
Earlier this week, the Bank of Canada kept its key rate unchanged at one per cent, where it has been since September 2010.
On the corporate front, Manulife Financial Corp. (TSX:MFC) announced after markets closed on Wednesday that it’s buying the Canadian operations of Standard Life for $4 billion in cash. Manulife said the acquisition will boost its presence in Quebec, which it has underserved in the past.
Standard Life has about 2,000 employees in Canada and $52 billion in assets under management as of June 30. It has a strong presence in Quebec, mainly in Montreal and Quebec City.
And on the commodity markets, the December crude contract on the New York Mercantile Exchange was down 24 cents to US$95.30 a barrel.
December bullion was up eight cents to US$1,271.2 an ounce, while December copper was up two cents to $3.14.