Equities
Global stocks declined, oil fell and safe-haven assets got a lift on news of rising Middle East tensions and fragile U.S.-China trade talks.
Wall Street and TSX futures were in the red.
On Wall Street, markets are watching earnings from Adobe Systems Inc. and Kroger Co.
Shares of planemaker Boeing lost 7.6 per cent premarket after an Air India aircraft with more than 200 people crashed in India’s western city of Ahmedabad. Aviation tracking site Flightradar24 said the plane was a Boeing 787-8 Dreamliner.
Relief stemming from positive U.S.-China trade talks earlier this week had evaporated by Thursday.
Adding more uncertainty, Trump said the U.S. would send out letters within weeks outlining the terms of trade deals to dozens of other countries, which they could embrace or reject.
“Markets may have no choice but to respond to Trump’s tariff threat – even if it’s just posturing to bring others to the table. The gap between ‘risk-on’ positioning and real-world risks has stretched too far,” said Charu Chanana, chief investment strategist at Saxobank.
Overseas, the pan-European STOXX 600 was 0.78 per cent lower in early afternoon trading. Britain’s FTSE 100 rose 0.063 per cent, Germany’s DAX lost 1.1 per cent and France’s CAC 40 was down 0.72 per cent.
In Asia, Japan’s Nikkei closed 0.65 per cent lower, while Hong Kong’s Hang Seng lost 1.36 per cent.
Commodities
Oil prices eased as traders assessed a U.S. decision to move personnel from the Middle East ahead of nuclear talks with Iran.
Brent crude futures were down 73 US cents to US$69.04 and West Texas Intermediate crude was 55 US cents lower at US$67.49 a barrel.
A day earlier, both Brent and WTI surged more than 4 per cent to their highest since early April.
Trump said the U.S. was moving personnel because the Middle East “could be a dangerous place.” He also said the U.S. would not allow Iran to have a nuclear weapon. Iran has said its nuclear activity is peaceful.
Increased tension with Iran has raised the prospect of disruption to oil supplies. Iran and the U.S. are set to meet on Sunday.
“For the oil market, the absolute nightmare is a closure of the Strait of Hormuz,” Global Risk Management analyst Arne Rasmussen said in a LinkedIn post.
“If Iran blocks this narrow chokepoint, it could affect up to 20% of global oil flows,” he added.
In other commodities, spot gold was up 0.2 per cent at US$3,360.29 an ounce.
Currencies and bonds
The Canadian dollar strengthened against its U.S. counterpart.
The day range on the loonie was 73.12 US cents to 73.4 US cents in early trading. The Canadian dollar was up about 2.36 per cent against the greenback over the past month.
The U.S. dollar, which has lost around 10 per cent in value against a basket of currencies this year, skimmed its lowest levels since late April.
The U.S. dollar index, which weighs the greenback against a group of currencies, lost 0.71 per cent to 97.93.
The euro gained 0.88 per cent to US$1.1589. The British pound rose 0.32 per cent to US$1.3589.
In bonds, the yield on the U.S. 10-year note was last down at 4.376 per cent ahead of the North American opening bell.
Economic news
U.K. GDP, industrial and manufacturing production and trade deficit
(8:30 a.m. ET) Canada’s National Balance Sheet and Financial Flow Accounts report for Q1.
(8:30 a.m. ET) U.S. initial jobless claims for week of June 7. Estimate is 242,000, up 2,000 from the previous week.
(8:30 a.m. ET) U.S. PPI for May. Consensus is a rise of 0.3 per cent from April and up 3.2 per cent year-over-year.
(10 a.m. ET) U.S. Quarterly Services Survey for Q1.
(12 p.m. ET) U.S. flow of funds for Q1.
With Reuters and The Canadian Press