Canadian dollar rises, stocks jump on news of TPP trade deal
The Canadian dollar climbed above 76 cents US and stocks rose sharply after news that the Trans-Pacific Partnership trade deal had been successfully negotiated.
The loonie was up more than one-third of a cent to 76.37 at the close, riding high in part because of weaker U.S. currency and stronger oil. The Canadian dollar closed at 76.03 on Friday, but the last time it sustained its value above 76 cents was in late July and early August before China devalued its currency.
The U.S. greenback is lower because of last week's disappointing jobs data out of the U.S., which could again delay the timetable for the U.S. Federal Reserve to raise rates.
"The absolutely weak nonfarm payrolls data complicated the Fed's resolve to raise rates this year. Markets reacted to the soft reading by buying both stocks and bonds," said IG analyst Bernard Aw in a report. "The soft jobs numbers in the last two months certainly make October rate lift-off an even more unlikely endeavour for a data-dependent Fed."
The signing of the TPP, which could open new markets, including Japan, for North American goods, made stock traders ebullient.
The TSX was up 212 points or 1.6 per cent at 13,552 at the close of trading.
That's despite a 10 per cent fall today in shares of Valeant, which is under scrutiny for its practice of buying up small drug companies and raising the price of the drugs. The stock is down 30 per cent since mid-September.
Investors have become increasingly concerned about whether that business model is sustainable as U.S. lawmakers prepare to crack down on the practice.
New York's Dow composite index rose 304 points to 16,776 and the broader S&P 500 index was up 35 points at 1,987.
Industrial and energy stocks rose, with General Electric up five per cent after activist investor Nelson Peltz bought a stake.
Global stock rally
The rise in North American markets followed gains in markets in Europe and Asia.
The weaker U.S. dollar has raised commodities prices and brightened prospects for commodities exporters around the world today.
European stocks also moved higher on renewed confidence in Glencore, the Swiss mining and commodities trading giant, whose stock rose 15 per cent today. It had lost about 30 per cent of its value last week after doubts about its future at a time when commodity prices are low.
There are reports Monday the company is in talks with potential buyers for its Canadian agricultural business, Viterra, boosting hopes among traders that it would lower its high corporate debt.
Oil was strong on Monday, following a report on Friday showing a sharp drop in the number of U.S. rigs in operation. West Texas Intermediate crude rose 80 cents or 1.8 per cent to $46.34 US a barrel and the Brent contract rose $1.23 to $49.36.
Crude also was buoyed by news that Russia would be willing to meet with other oil producers, including OPEC members, to discuss the market.
