Thursday 9/10/2026 p.m.

• Markets close lower as yields and oil extend their rise – The TSX and U.S. equity markets ended lower on Thursday as rising bond yields and oil prices weighed on investor sentiment. The 10-year Government of Canada ended at 3.94%, while the 10-year Treasury yield reached 4.95%, their highest levels in nearly three years. Internationally, European markets also pulled back after the European Central Bank raised its key deposit rate to 2.5%, from 2.25%, as widely expected. In energy markets, WTI crude approached $103 per barrel amid continued disruptions in the Strait of Hormuz. The U.S. dollar strengthened against most major currencies, supported by higher Treasury yields.
   
• Producer price inflation rises as expected –U.S. Producer Price Index (PPI) inflation increased to 5.4% year over year in August, from 4.8% in July, in line with estimates. Energy prices rose 4.2% during the month, accounting for most of the 1.1% monthly increase in goods prices. Services prices remained subdued, rising just 0.1% month-over-month. Core PPI inflation, which excludes the more volatile food and energy components, increased to 4.6% year over year, also matching estimates. The report suggests that wholesale inflation pressures remain elevated, with higher energy costs posing an additional risk to the near-term inflation outlook. Although the results were broadly anticipated, firmer headline and core readings appear to have reinforced expectations for tighter Fed policy. Futures markets increased the implied likelihood of a Fed rate hike next week to 73%, up from 61% yesterday. The report's composition offers some reassurance, particularly given the modest increase in services prices. However, persistent core inflation and renewed energy pressures could complicate the Fed’s path toward price stability.
   
• Jobless claims edge lower – U.S. initial jobless claims declined modestly to 206,000 this past week, compared with expectations for 205,000. Continuing claims, which measure the total number of people receiving benefits, were little changed at 1.77 million, below forecasts for 1.79 million. Together, the figures suggest that layoffs remain limited and labor-market conditions are relatively healthy. Continued resilience in employment should support household income and consumer spending, while giving the Fed greater flexibility to remain focused on inflation.

Brian Therien, CFA;
Investment Strategy

^{Source for all data: FactSet.}