TSX Slumps as Oil Plunges, Jobs Report Looms

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TSX Slumps as Oil Plunges, Jobs Report Looms

S&P/TSX35,620.00-1.74%

USD/CAD1.40-0.10%

EUR/CAD1.57+0.15%

WTI Crude99.34-4.59%

Market Snapshot

Asset	Level	Change
S&P/TSX	35,620.00	-1.74%
USD/CAD	1.40	-0.10%
EUR/CAD	1.57	+0.15%
WTI Crude	99.34	-4.59%
Natural Gas	2.93	+1.04%
Gold	3,913.40	+0.37%
Brent Crude	108.37	-7.88%
Bitcoin	77,789.76	-0.59%
Canada 2Y Govt Yield	3.36%	-5 bp
Canada 10Y Govt Yield	3.84%	-3 bp

Prior Economic Events

Data	Prior	Cons	Actual
No events available

Today's Economic Events

Data	Prior	Cons	Time
S&P Global Manufacturing PMI Index	51.50	-	09:30

Wednesday (2026-11-04)
Trade Balance	4,200m	6,100m	08:30

Friday (2026-11-06)
Headline Unemployment Rate	6.50	6.50	08:30
Employment Change	-68,300	12,500	08:30
Full-Time Employment Change	-35,400	-	08:30
Labor Force Participation	64.80	-	08:30
Part-Time Employment Change	-32,900	-	08:30
Ivey PMI Seasonally Adjusted	58.20	58	10:00

S&P/TSX falls 1.74% as risk-off sentiment and AI spending fears hit tech; WTI down 4.59% to $99.34
Canada 2Y yield drops 5 bp to 3.36%, 10Y down 3 bp to 3.84% as bond markets rally on growth concerns
Manufacturing PMI due today; Friday's jobs report critical after prior month's 68,300 decline

Yesterday's Recap

Canadian markets faced broad risk-off pressure with the S&P/TSX declining 1.74%, driven by tech sector weakness tied to AI spending concerns and slowing domestic growth momentum. WTI crude plunged 4.59% to $99.34 while Brent fell even sharper at 7.88% to $108.37, pressuring energy-heavy TSX components. The Canadian dollar held relatively steady, with USD/CAD edging down 0.10% to 1.40 despite the commodity selloff.

Bond markets rallied as investors sought safety, pushing the 2-year Government of Canada yield down 5 bp to 3.36% and the 10-year down 3 bp to 3.84%. Natural gas bucked the trend, gaining 1.04% to $2.93, while gold rose 0.37% to $3,913.40. The session reflected growing skepticism about Canadian growth prospects following recent GDP data showing a slowdown to 1.3% in Q3.

The Day Ahead

Today's sole scheduled release is the S&P Global Manufacturing PMI at 09:30 ET, with the prior reading at 51.5 and no consensus estimate provided. Attention shifts to Wednesday's trade balance data, where consensus expects a $6.1 billion surplus versus the prior $4.2 billion. The week's critical event arrives Friday with the Labour Force Survey, where headline unemployment is expected to hold at 6.5% and employment change consensus sits at +12,500 following last month's -68,300 contraction.

Full-time employment, part-time employment, and labor force participation data will provide granularity on labor market health. The Ivey PMI on Friday at 10:00 ET carries high impact with consensus at 58.0 versus the prior 58.2.

Other Economic Notes

Canada's inflation picture remains concerning with CPI running at 3.09% year-over-year as of September, well above the Bank of Canada's 2% target midpoint. The recent GDP slowdown to 1.3% in Q3 suggests the economy is losing momentum even as price pressures persist, creating a challenging stagflationary backdrop. The Canadian dollar's weakening correlation to oil prices is amplifying bearish bets against the currency, according to recent market commentary.

Canadian oil discounts have widened beyond US$30 amid Gulf Coast pressures, with governments prioritizing trade diversification away from the U.S. amid broader trade tensions. ↓ p.2

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Other Economic Notes (continued)

The federal budget, expected shortly, will be scrutinized for fiscal support measures given the slowing growth environment.

Global Macro News

Global markets remain rattled by AI spending fears that have hit technology stocks across major indices, with the TSX not immune to the contagion. Oil markets experienced a sharp selloff with Brent down nearly 8%, reflecting demand concerns amid broader risk-off sentiment. The Bank of England is reconsidering its interest rate stance, with policymakers debating whether rates are sufficiently restrictive to contain inflation, signaling potential shifts in global monetary policy coordination.

U.S. fiscal concerns are mounting, with Bank of Canada Governor warnings that American deficit spending threatens to raise borrowing and mortgage costs north of the border. Currency markets show the Canadian dollar near September 16 highs as weaker USD offsets declining oil prices, though the currency's traditional oil linkage appears to be breaking down.

Bitcoin slipped 0.59% to $77,789.76, reflecting cautious risk appetite. The rupee opened marginally higher against the dollar as oil price volatility and risk-off sentiment capped gains in emerging market currencies.

Continuation

BoC Watch

The Bank of Canada raised its policy rate to 2.50% at the October 28 decision, marking the first rate increase since 2023 and signaling a shift toward tighter monetary policy as inflation pressures mount. The central bank's forward guidance indicates further increases remain possible, with the next decision scheduled for December 9. Commercial banks have already raised prime rates in response, transmitting the policy tightening to borrowing costs for households and businesses.

Governor Macklem has warned that U.S. deficit spending threatens to raise borrowing and mortgage costs in Canada, highlighting the sensitivity of domestic financial conditions to cross-border fiscal dynamics. The BoC has also flagged continued weakness in the economy, suggesting the Governing Council is balancing inflation control against growth risks.

Markets are pricing the December 9 meeting as a critical juncture, with the recent bond rally suggesting investors anticipate the central bank may need to moderate its tightening path if growth continues to disappoint.

Canada Macro Daily(Beta Mode)