Canadian stocks Close Moderately Higher on Thursday

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Index Update: The S&P/TSX Composite Index rose 0.37% to 25,254.06 on Thursday, a one-month high as energy stocks rallied on firmer oil prices and a wave of reassuring corporate results. Global stock markets experienced a further boost following US President Donald Trump's announcement of a broad trade agreement with the UK. This deal igniting optimism about a potential reduction in trade barriers and strengthening investors' willingness to take on risk in equity markets worldwide.

Macro Update: Canada's longer-term borrowing costs have risen, pushing the 10-year government bond yield above 3.22%, a two-week peak. This increase stems from a combination of domestic factors, including the Bank of Canada's cautious approach to interest rate cuts due to high household debt and the significant role of leveraged hedge funds in bond auctions. International pressures also contribute, with the U.S. Federal Reserve's decision to maintain rates and its warnings about persistent inflation bolstering U.S. Treasury yields. Furthermore, ongoing trade tensions between the U.S. and Canada, only partially mitigated by other trade agreements, have increased the risk premium sought by investors. The Canadian dollar has weakened past 1.39 per US dollar, retreating from its strongest levels since early May, as a resurgent U.S. dollar exerts downward pressure. The Federal Reserve's decision to hold interest rates steady, coupled with its cautious outlook on inflation and unemployment, has supported the greenback.

Top Movers and Losers: The biggest gainers of the session on the S&P/TSX Composite were OceanaGold Corporation (TSX: OGC), which rose 12.57%. Algoma Steel Group Inc (TSX: ASTL) added 10.52% and Linamar Corporation (TSX: LNR) was up 9.25%. Biggest losers included Fortuna Mining Corp (TSX: FVI), which fell 12.53%. First Majestic Silver Corp. (TSX: AG) declined 11.34% and Calibre Mining Corp (TSX: CXB) down 8.81%.

Our Stance: The index remains well above its 21-period Simple Moving Average (SMA), reinforcing a bullish trend. The Relative Strength Index (RSI) stands at 61.73, indicating a healthy momentum that could support further gains. However, the index is currently testing a key support level near 24,800.

Commodity Update: The dollar rose for the week amid fading U.S. rate cut bets and optimism from a U.S.-UK trade deal, boosting hopes for U.S.-China talks. Gold dipped 0.02% to $3,305.60, silver fell 0.21% to $32.55, and copper slid 0.51% to $9,388.60. Brent crude edged up 0.20% to $62.95, tempered by dollar strength. Geopolitical tensions flared as India and Pakistan saw their worst clashes in decades.

Technical Update: The S&P/TSX Composite Index posted a strong performance on Thursday, climbing 92.88 points, or 0.37%, to close at 25,254.06. This advance reflects continued investor optimism and solid trading volumes, with the technology sector leading the way, up 1.19%. On the technical front, the index remains well above its 21-period Simple Moving Average (SMA), reinforcing a bullish trend. The Relative Strength Index (RSI) stands at 61.73, indicating a healthy momentum that could support further gains. However, the index is currently testing a key support level near 24,800. Holding this level is crucial for preserving the upward trajectory; a breakdown could trigger a pullback toward the next major support zones between 24,600 and 24,300. To sustain its rally, the index must stay above these critical support thresholds.