Equities
Global markets were subdued, in the wake of losses on Wall Street overnight, after Federal Reserve chairman Jerome Powell fell short of confirming investors’ expectations that U.S. interest rates will decline sharply in coming months.
Wall Street futures edged up, while TSX futures climbed after Canada’s main stock market touched a milestone 30,000 before closing lower yesterday.
In Canada, investors are getting results from AGF Management Ltd.
On Wall Street, markets are watching earnings from Cintas Corp.
“There was a clear pivot at the last [Fed] meeting which set the direction, but the pace (of cuts) is something we’ll have to see,” Daiwa Capital economist Chris Scicluna said.
“All markets, if you’re looking on the fixed-income side or the equity side, are taking comfort from the expectation that the Fed will be easing for the remainder of this year and again next year and take them basically moving from a restrictive stance to a neutral stance,” he said.
Overseas, the pan-European STOXX 600 was down 0.35 per cent in morning trading. Britain’s FTSE 100 declined 0.2 per cent, Germany’s DAX slid 0.16 per cent and France’s CAC 40 gave back 0.56 per cent.
In Asia, Japan’s Nikkei closed 0.3 per cent higher, while Hong Kong’s Hang Seng rose 1.37 per cent.
Commodities
Oil prices rose as an industry report showed U.S. crude inventories declined last week, adding to a sense in the market of tightening supplies amid export issues in Kurdistan and Venezuela and disruptions to Russian supplies.
Brent futures advanced 1.1 per cent to US$68.40 a barrel. West Texas Intermediate (WTI) crude futures gained 1.2 per cent to US$64.16.
“The market is expecting supply excess and stock builds globally in the last quarter of the year, but the focus recently has shifted back to Eastern Europe and the possible introduction of fresh sanctions on Russia,” said PVM Oil Associates analyst Tamas Varga.
In other commodities, spot gold was steady at US$3,762.73 an ounce. U.S. gold futures for December delivery edged down 0.5 per cent to US$3,795.80.
Currencies and bonds
The Canadian dollar weakened against its U.S. counterpart.
The day range on the loonie was 72.04 US cents to 72.30 US cents in early trading. The Canadian dollar was down about 0.61 per cent against the greenback over the past month.
The U.S. dollar index, which weighs the greenback against a group of currencies, jumped 0.48 per cent to 97.73.
The euro dropped 0.52 per cent to US$1.1755. The British pound fell 0.43 per cent to US$1.3466.
In bonds, the yield on the U.S. 10-year note was last up at 4.136 per cent.
Economic news
Japan PMI and machine tool orders
Germany business sentiment
(8:30 a.m. ET) Canada’s population estimates for Q2.
(10 a.m. ET) U.S. new home sales for August. The Street is projecting an annualized rate decline of 0.3 per cent.
With Reuters and The Canadian Press