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Stocks Are Little Changed After BoC Maintains Rates - Canadian Commentary

The Canadian stock market got off to a weak start Wednesday, but has since pared its early gains and climbed into positive territory. As expected, the Bank of Canada made no change to its interest rate this morning, maintaining its overnight rate target at 1.25 percent.

Markets on Wall Street opened sharply lower Wednesday morning, but have begun to pare their early losses. The weak open followed the announcement that White House chief economic advisor Gary Cohn has resigned. The resignation by Cohn, a free trade advocate, comes after President Donald Trump announced plans to impose tariffs on steel and aluminum imports.

Markets in Europe are turning in a mixed performance Wednesday, but remain little changed overall.

The benchmark S&P/TSX Composite Index is up 20.97 points or 0.13 percent at 15,566.16.

On Tuesday, the index closed up 3.91 points or 0.03 percent, at 15,545.19. The index scaled an intraday high of 15,590.97 and a low of 15,503.75.

The Capped Information Technology Index is gaining 0.62 percent. Descartes Systems Group (DSG.TO) is higher by 1.87 percent and Constellation Software (CSU.TO) is advancing 0.72 percent. Sierra Wireless (SW.TO) is climbing 0.90 percent.

The Capped Telecommunication Services Index is up 0.46 percent. BCE (BCE.TO) is climbing 0.46 percent and TELUS (T.TO) is rising 0.51 percent. Rogers Communications (RCi-B.TO) is higher by 0.41 percent.

The heavyweight Financial Index is increasing 0.30 percent. Canadian Imperial Bank of Commerce (CM.TO) is gaining 0.58 percent and Royal Bank of Canada (RY.TO) is up 0.30 percent. Bank of Montreal (BMO.TO) is advancing 0.26 percent and Bank of Nova Scotia (BNS.TO) is climbing 0.64 percent. Toronto-Dominion Bank (TD.TO) is rising 0.36 percent and National Bank of Canada (NA.TO) is adding 0.09 percent.

The Energy Index is rising 0.12 percent. Crude oil prices are falling Wednesday on U.S. inventory data.

The American Petroleum Institute (API) reported a huge build of 5.661 million barrels of United States crude oil inventories for the week ending March 2. Analysts had expected a much smaller build.

The U.S. Energy Information Administration reported this morning that U.S. crude inventories rose by 2.4 million barrels last week.

Suncor Energy (SU.TO) is higher by 1.04 percent and Husky Energy (HSE.TO) is advancing 0.03 percent. Imperial Oil (IMO.TO) is increasing 0.26 percent and Encana (ECA.TO) is climbing 1.36 percent.

The Gold Index is decreasing 0.55 percent. Gold prices are down slightly Wednesday, after White House chief economic adviser Gary Cohn, an advocate for free trade, resigned from the Trump administration.

Goldcorp Inc. (G.TO) is weakening by 0.35 percent and Barrick Gold (ABX.TO) is losing 0.13 percent. IAMGOLD (IMG.TO) is lower by 1.30 percent and Yamana Gold (YRI.TO) is down 0.80 percent. Kinross Gold (K.TO) is decreasing 0.42 percent and B2Gold (BTO.TO) is losing 1.17 percent.

The Capped Materials Index is down 0.18 percent. Agnico Eagle Mines (AEM.TO) is decreasing 0.26 percent and Franco-Nevada (FNV.TO) is losing 0.41 percent.

On the economic front, Canada's merchandise trade deficit totaled $1.9 billion in January, narrowing from a $3.1 billion deficit in December. Imports decreased 4.3% and exports fell 2.1%. Economists had expected a trade deficit of $2.5 billion.

A separate report from Statistics Canada this morning showed that Canadian labor productivity increased by 0.2 percent in the fourth quarter.

The euro area economy expanded at a slightly slower pace, as initially estimated, in the fourth quarter, data from Eurostat showed Wednesday. Gross domestic product grew 0.6 percent sequentially, following the 0.7 percent expansion seen in the third quarter.

France's foreign trade gap widened notably at the start of the year, as exports fell and imports rose, Data from customs office showed Wednesday. The trade deficit widened to EUR 5.6 billion in January from EUR 3.4 billion in December. The expected shortfall was EUR 4.45 billion.

The French current account gap widened at the start of the year, data from the Bank of France showed Wednesday. The current account deficit rose to EUR 1.6 billion in January from EUR 0.8 billion in December.

UK house prices grew at the slowest pace in five years in February on squeezed income and uncertainty stemming from Brexit, data from the Lloyds bank subsidiary Halifax and IHS Markit showed Wednesday. House prices increased 1.8 percent year-on-year in the three months to February, slower than the 2.2 percent rise registered in January.

This was the weakest rate since March 2013. Nonetheless, the pace of growth was faster than the expected 1.6 percent.

A report released by payroll processor ADP on Wednesday showed private sector employment in the U.S. increased by more than expected in the month of February. ADP said employment in the private sector jumped by 235,000 jobs in February after surging up by a revised 244,000 jobs in January.

Economists had expected an increase of about 195,000 jobs compared to the addition of 234,000 jobs originally reported for the previous month.

Reflecting a notable decrease in the value of exports, the Commerce Department released a report on Wednesday showing the U.S. trade deficit widened by more than expected in the month of January. The report said the trade deficit widened to $56.6 billion in January from $53.9 billion in December. The deficit had been expected to widen to $55.1 billion.

Revised data released by the Labor Department on Wednesday showed U.S. labor productivity was unchanged in the fourth quarter.

The Labor Department said labor productivity was unchanged in the fourth quarter compared to the previously reported 0.1 percent drop. Economists had expected the dip in productivity to be unrevised.

Meanwhile, the report said unit labor costs surged up by 2.5 percent compared to the previously reported 2.0 percent jump. The increase in labor costs was expected to be revised to 2.1 percent.

In commodities, crude oil futures for April delivery are down 0.72 or 1.15 percent at $61.88 a barrel.

Natural gas for April is up 0.022 or 0.80 percent at $2.771 per million btu.

Gold futures for April are down 3.29 or 0.25 percent at $1,331.90 an ounce.

Silver for May is down 0.199 or 1.19 percent at $16.585 an ounce.

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