Equities
World markets were mixed after the U.S. Federal Reserve forecast just one interest rate cut this year, fewer than previously projected, even as inflation cooled in May.
The Nasdaq and S&P 500 rose at the open, led by a jump in chip stocks, after lower-than-forecast producer inflation data fanned expectations of interest rate cuts from the Fed.
The Dow Jones Industrial Average opened 0.09 per cent lower at 38,677.12, while the S&P 500 rose 0.39 per cent to 5,441.93 and the Nasdaq Composite gained 0.61 per cent to 17,715.27 at the bell.
S&P/TSX composite index edged lower on weak commodity prices, down 0.35 per cent to 21,883.91 at the open.
On Wall Street, markets will be watching earnings from Adobe Systems Inc.
“We heard the Fed tweak its communication slightly: they no longer think that there is a ‘lack’ of progress in inflation toward the 2-per-cent goal but a ‘modest further progress’ instead,” Ipek Ozkardeskaya, senior analyst at Swissquote Bank, wrote in a note.
“And that’s a big deal for the doves obviously because a progress is a progress even if it’s small.”
Overseas, the pan-European STOXX 600 was down 0.6 per cent in morning trading. Britain’s FTSE 100 slid 0.3 per cent, Germany’s DAX fell 0.98 per cent and France’s CAC 40 dropped 1.08 per cent.
In Asia, Japan’s Nikkei closed 0.4 per cent lower at 38,720.47, while Hong Kong’s Hang Seng rose 0.97 per cent to 18,112.63.
Commodities
Oil prices edged higher after U.S. markets opened to softer inflation data.
Brent crude futures rose 0.3 per cent to US$82.38 a barrel and West Texas Intermediate (WTI) crude futures rose 0.2 per cent to US$78.66. Both benchmarks had gained about 0.8 per cent yesterday.
In other commodities, spot gold was down 0.5 per cent at US$2,310.30 per ounce and U.S. gold futures fell 1.1 per cent to US$2,328.20.
Currencies and bonds
The Canadian dollar weakened against its U.S. counterpart, which started to recover some of yesterday’s losses.
The day range on the loonie was 72.71 US cents to 73.01 US cents in the early premarket period. The Canadian dollar was down about 0.93 per cent against the greenback over the past month.
The U.S. dollar index, which weighs the greenback against a group of currencies, rose 0.21 per cent to 104.86.
The euro dropped 0.15 per cent to US$1.0793, while the British pound fell 0.12 per cent to US$1.2782.
In bonds, the yield on the U.S. 10-year note dipped to 4.274 per cent ahead of the North American opening bell.
Economic news
Bank of Japan meeting and monetary policy announcement (through Friday)
Euro zone industrial production
(8:30 a.m. ET) Canada’s national balance sheet and financial flow accounts for Q1.
(8:30 a.m. ET) U.S. initial jobless claims for week of June 8. Estimate is 225,000, down 4,000 from the previous week.
(8:30 a.m. ET) U.S. PPI final demand for May, which unexpectedly fell 0.2 per cent amid lower energy costs.
(9:35 a.m. ET) Bank of Canada deputy governor Sharon Kozicki speaks at the Canadian Association for Business Economics.
With Reuters and The Canadian Press