12:14 PM EDT, 07/05/2024 (MT Newswires) -- The Toronto Stock Exchange is down 88 points at midday, with Energy (-2%), the biggest decliner, followed by industrials, down 0.9%.

Miners (+0.6%) and healthcare (+0.5%), are the sole gainers.

Oil prices were mostly steady early on Friday, sticking near a seven-week high on robust summer demand.

Gold prices rose as U.S. hiring slowed sharply in June, supporting expectations the Federal Reserve could move to lower interest rates as soon as September.

But natural gas prices fell to a seven-week low as increased production of the fuel offsets a jump in cooling demand caused by summer heat.

Separately, market watchers in Canada and in the United States were waiting on respective jobs data for clues on the likely rate path in both countries.

On the U.S. data, TD Economics said the resultant deceleration in average hourly earnings in June will be viewed "favorably" by the Federal Reserve as it looks for signs of waning spending, which would aid in cooling inflation. TD noted Chair Powell said earlier this week that recent inflation reports have been encouraging, but that more confidence would be needed before the FOMC considers adjusting the monetary policy stance. June's employment report should bolster the Fed's confidence as we await the June CPI inflation report next week, TD added.

Meanwhile, on Canada, CIBC said there was an early summer lull in the labour market, particularly for students looking for work before returning to their studies. CIBC noted he -1K change in employment contrasted to consensus expectations for a 25K gain. With the population increasing by nearly 100K on the month, the stall in employment meant that the jobless rate rose two ticks to 6.4% (consensus 6.3%). It said while core measures of inflation accelerated last month, the continued loosening of labour market conditions should give the Bank of Canada comfort that inflation will converge to its 2% target over time. CIBC maintains its forecast for a second 25bp cut at the next meeting later this month, although it added upcoming CPI data remain important to that call.

For RBC, the bottom line is that the dip in employment in June is small but layoffs are "creeping higher" under the surface. RBC noted the unemployment rate is now up 1.6 percentage points from its post-pandemic lows -- a larger increase than in some historical 'recessions' -- while a downtrend in hiring demand with lower job openings has shown no sign of ending. RBC said the BoC will still be watching the next round of inflation data and its own Business Outlook Survey closely ahead of the next interest rate decision later this month (July 24). But, the bank added, "with interest rates still at restrictive levels, the bar to at least easing off the monetary policy brakes further in the near-term is lower". The June labour market data increases the odds that the central bank will cut rates in July.