Equities
Global markets were mixed amid cautious optimism over progress in U.S.-China trade talks, although investors awaited further details on the framework agreed upon by the two countries.
U.S. stock index futures turned positive as a cooler-than-expected consumer inflation report calmed worries around President Donald Trump’s tariffs worsening price pressures. TSX futures followed sentiment higher.
In Canada, investors are getting results from Dollarama Inc.
The retailer beat analysts’ estimates for sales and profit growth in the first quarter, as shoppers continue to visit discount stores more frequently to cut back on expenses. It posted net sales of $1.52-billion for the first quarter, compared with analysts’ forecasts of $1.5-billion.
On Wall Street, markets are watching earnings from Oracle Corp. and Chewy Inc.
“Even though details are scant, as long as the two sides are talking, I think markets will be happy,” said Carol Kong, a currency strategist at Commonwealth Bank of Australia.
“It will still be very hard and it will take a long time for both sides to reach a comprehensive trade agreement,” she added. “That sort of comprehensive deal usually takes years to be reached, so I’m skeptical that a framework reached at the meeting in London will be comprehensive.”
Overseas, the pan-European STOXX 600 was 0.12 per cent lower in morning trading. Britain’s FTSE 100 was little changed, Germany’s DAX gained 0.08 per cent and France’s CAC 40 gave back 0.05 per cent.
In Asia, Japan’s Nikkei closed 0.55 per cent higher, while Hong Kong’s Hang Seng rose 0.84 per cent.
Commodities
Oil prices edged up toward a seven-week high as markets assessed the outcome of U.S.-China trade talks, yet to be reviewed by U.S. President Donald Trump.
Brent crude futures were up 0.12 per cent to US$67.69 a barrel, while West Texas Intermediate crude gained 1.5 per cent to US$65.94.
Trade-related downside risk in oil has been temporarily removed, although the market reaction has been tepid as it is not clear how economic growth and global oil demand will be affected, said PVM analyst Tamas Varga.
”.. I think it removes some downside risks, particularly to the Chinese economy and steadies the ship for the U.S. economy - both of which should be supportive for crude oil demand and the price,” said Tony Sycamore, a market analyst for IG.
In other commodities, spot gold advanced 0.4 per cent to US$3,336.20 an ounce. U.S. gold futures rose 0.4 per cent to US$3,347.
Currencies and bonds
The Canadian dollar weakened against its U.S. counterpart.
The day range on the loonie was 73.04 US cents to 73.19 US cents in early trading. The Canadian dollar was up about 2.25 per cent against the greenback over the past month.
The U.S. dollar index, which weighs the greenback against a group of currencies, declined 0.08 per cent to 99.02.
The euro rose 0.1 per cent to US$1.1437. The British pound was little changed at US$1.3499.
In bonds, the yield on the U.S. 10-year note was last up at 4.501 per cent.
Economic news
(8:30 a.m. ET) Canadian building permits for April. Estimate is a month-over-month rise of 1.5 per cent.
(8:30 a.m. ET) U.S. CPI for May, which increased 0.1 per cent from the previous month and at an annualized 2.4 per cent. The Street is expecting an increase of 0.2 per cent and up 2.5 per cent year-over-year.
(2 p.m. ET) U.S. budget balance for May.
With Reuters and The Canadian Press