CANADA STOCKS-TSX futures fall as cautious markets await U.S. jobs data

By Shashwat Chauhan

Oct 6 (Reuters) - Futures tracking Canada's main stock index fell on Thursday, with investors awaiting U.S. jobs data due this week to gauge the Federal Reserve's future actions around interest rates.

December futures on the S&P/TSX index were down 0.5% at 07:12 a.m. ET, pointing to a second day of fall for the TSX.

The index climbed 5% at the beginning of this week on hopes that central banks might pivot sooner-than-expected from their hawkish stance to combat inflation.

Ahead of the closely watched U.S. nonfarm payrolls data on Friday, jobless claims data will be reported before markets open on Thursday, with expectations of claims rising — a sign that the labor market may be beginning to cool.

The overarching view, however, is that Friday's jobs report will do little to weaken the Fed's determination to raising interest rates fast to tackle inflation - a view confirmed by a number of central bank officials overnight.

Meanwhile, oil prices slipped but held near a three-week high after OPEC+ agreed to further tighten global crude supply with a deal to slash production by about 2 million barrel per day, the largest reduction since 2020.

The agreement comes ahead of a European Union embargo on Russian oil and would squeeze supplies in an already tight market, adding to inflation.

Meanwhile, the Canadian dollar is set to fall short of a September forecast for the coming year following sharp losses in recent weeks and as rate hikes by the Bank of Canada threaten to push the domestic economy into recession, a Reuters poll showed.

The Canadian central bank has already raised its overnight lending rates by 300 basis points in six months to fight inflation, which began to cool slightly in July but is still running at levels not seen in nearly four decades.

Traders are pricing in a 39.7% chance of a 50 bps hike by Canada's apex bank.

Among individual companies, Suncor Energy Inc said on Wednesday it would sell its wind and solar assets in Canada to Canadian Utilities Ltd for C$730 million ($536.17 million). (Reporting by Shashwat Chauhan in Bengaluru; editing by Uttaresh.V)