Equities
Global markets slid after U.S. President Donald Trump announced he was firing Federal Reserve governor Lisa Cook, an unprecedented move that further undermines confidence in the Fed’s independence and U.S. assets.
Wall Street futures were in negative territory as the news muddied the outlook for Fed policy and stoked uncertainty over prospects for a rate cut next month
TSX futures followed sentiment lower.
In Canada, investors are getting results from Bank of Montreal and Bank of Nova Scotia.
BMO reported a rise in third-quarter profit as it set aside less in its provisions for potential loan losses.
Scotiabank also saw a third-quarter profit boost, as it earned higher interest.
“Since he took office, Trump has managed to get his way on most things he has turned his attention to,” said RBC BlueBay Asset Management Chief Investment Officer Mark Dowding.
“In this context, it may seem reasonable for markets to conclude that he may end up getting his way with the Federal Reserve.”
Overseas, the pan-European STOXX 600 was down 0.45 per cent in morning trading. Britain’s FTSE 100 dropped 0.38 per cent, Germany’s DAX fell 0.26 per cent and France’s CAC 40 gave back 1.3 per cent.
In Asia, Japan’s Nikkei closed 0.97 per cent lower, while Hong Kong’s Hang Seng dropped 1.18 per cent.
Commodities
Oil prices eased after surging nearly 2 per cent yesterday, with traders keeping a close eye on developments regarding the Ukraine war that could disrupt Russian fuel supplies.
Brent crude fell 1.57 per cent to US$67.72 a barrel, while West Texas Intermediate (WTI) crude lost about 1.74 per cent to US$63.67 a barrel.
“The modest setback today is due to risk aversion, with equity markets trading lower,” said UBS analyst Giovanni Staunovo. “Geopolitical factors are something to watch for, particularly what Trump might do if there is no meeting between Russia and Ukraine.”
In other commodities, spot gold gained 0.4 per cent to US$3,378.64 an ounce. U.S. gold futures for December delivery rose 0.3 per cent to US$3,426.
Currencies and bonds
The Canadian dollar strengthened against its U.S. counterpart.
The day range on the loonie was 72.11 US cents to 72.25 US cents in early trading. The Canadian dollar was down about 0.54 per cent against the greenback over the past month.
The U.S. dollar index, which weighs the greenback against a group of currencies, was down 0.2 per cent to 98.23.
The euro gained 0.26 per cent to US$1.1650. The British pound advanced 0.19 per cent to US$1.3480.
In bonds, the yield on the U.S. 10-year note was last up at 4.284 per cent.
Economic news
(8:30 a.m. ET) Canada’s manufacturing sales for July.
(8:30 a.m. ET) Canadian wholesale trade for July.
(8:30 a.m. ET) U.S. durable orders for July. Consensus is a month-over-month decline of 4.0 per cent with a core orders rise of 0.3 per cent.
(9 a.m. ET) U.S. S&P CoreLogic Case-Shiller Home Price Index (20 city) for June. Consensus is a decline of 0.1 per cent from May but up 1.9 per cent year-over-year.
(9 a.m. ET) U.S. FHFA House Price Index for June. The Street expects a flat reading month-over-month and a gain of 2.7 per cent year-over-year.
(10 a.m. ET) U.S. Conference Board Consumer Confidence Index for August.
(2:30 p.m. ET) Bank of Canada governor Tiff Macklem speaks at the Bank of Mexico’s 100th anniversary seminar.
With Reuters and The Canadian Press