Equities
Global stocks rose and U.S. markets were set for a lower open as investors took stock of the debt load of the world’s biggest economy and watched for news of global trade progress with G7 finance ministers set to meet in Alberta.
Wall Street futures were in the red.
TSX futures were up.
On Wall Street, markets are watching earnings from Home Depot Inc. and Palo Alto Networks Inc.
Underlying concerns about mounting U.S. debt remained in focus.
In the previous session, stocks initially struggled and U.S. Treasuries sold off sharply on worries about the U.S. fiscal position after Moody’s late on Friday downgraded the U.S. credit rating. The rating change underscored worries about the impact of a major tax cutting bill proceeding through Congress, which faces a crucial vote this week.
Both stocks and Treasures rebounded in late Monday trading and the calm was maintained in Asian and European trading on Tuesday.
“Interestingly, markets rapidly shrugged off the US rating downgrade,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
“Still, the broader narrative of declining confidence in US Treasuries and the US dollar remains intact. This opens a window of opportunity for investors looking beyond US markets—an exciting prospect for those seeking the next big destination."
Overseas, the pan-European STOXX 600 was up 0.68 per cent in early afternoon trading. Britain’s FTSE 100 gained 0.72 per cent, Germany’s DAX rose 0.41 per cent and France’s CAC 40 was up 0.64 per cent.
In Asia, Japan’s Nikkei closed 0.08 per cent higher, while Hong Kong’s Hang Seng closed up 1.49 per cent.
Commodities
Oil prices steadied with uncertainty lingering about U.S.-Iran negotiations and Russia-Ukraine peace talks.
Traders also assessed new government data that delivered a cautious outlook for top crude-importer China’s economy.
Brent futures slipped 25 US cents to US$65.28 a barrel.
June West Texas Intermediate crude futures, which expire on Tuesday, were down 20 US cents to US$64.6, while the more active July contract was down 19 US cents at US$61.95 a barrel.
Iran’s Supreme Leader Ayatollah Ali Khamenei voiced doubts over whether nuclear talks with the U.S. would lead to an agreement, Mehr News reported, as Tehran reviewed a proposal to hold a fifth round of negotiations.
A deal between the two countries would allow Iran to raise oil exports by 300,000 barrels to 400,000 barrels per day if sanctions were eased, StoneX analyst Alex Hodes said.
In other commodities, spot gold was up 0.2 per cent at US$3,236.94 an ounce.
Currencies and bonds
The Canadian dollar strengthened against its U.S. counterpart.
The day range on the loonie was 71.58 US cents to 71.83 US cents in early trading. The Canadian dollar was down about 0.86 per cent against the greenback over the past month.
The U.S. dollar index, which weighs the greenback against a group of currencies, lost 0.03 per cent to 100.39.
The euro lost 0.13 per cent to US$1.1229. The British pound lost 0.14 per cent to US$1.3339.
In bonds, the yield on the U.S. 10-year note was up at 4.494 per cent ahead of the North American opening bell.
Economic news
Euro zone consumer confidence
(8:30 a.m. ET) Canadian CPI for April. The Street is forecasting a decline of 0.2 per cent from March and a rise of 1.6 per cent year-over-year.
(8:30 a.m. ET) Canada’s household and mortgage credit for March.
With Reuters and The Canadian Press