Equities
Global markets were mostly higher as signs of easing trade tensions between China and the U.S. buoyed risk appetite, in a strong start to a week that will be headlined by central bank meetings and megacap earnings.
Wall Street futures pointed to a sharp rally at the open, as Nasdaq futures rose 1.4 per cent and those for the S&P 500 gained 0.9 per cent as of 7:30 a.m. ET.
TSX futures followed sentiment higher ahead of the Bank of Canada’s next interest-rate decision this week. As Mark Rendell reports, the central bank is widely expected to cut interest rates again, with the fragile business climate and a new bout of trade uncertainty predicted to outweigh concerns about an uptick in inflation.
In trade news, Prime Minister Mark Carney says he expects to meet Chinese President Xi Jinping this week at an international summit in South Korea as the two countries attempt to repair a six-year rupture in relations and resolve a punishing trade war.
In Canada, investors are getting results from Celestica Inc. and Parkland Fuel Corp. As Joe Castaldo reports, Celestica has seen its share price soar close to 340 per cent since last year. The question is how much longer the ascent can continue.
On Wall Street, markets are watching earnings from Waste Management Inc. and Nucor Corp.
“Investors will want to see confirmation that the trade truce holds and that China’s stimulus and reform signals translate into tangible growth momentum,” said Charu Chanana, chief investment strategist at Saxo.
Overseas, the pan-European STOXX 600 was up 0.07 per cent in morning trading. Britain’s FTSE 100 rose 0.1 per cent, Germany’s DAX slipped 0.08 per cent and France’s CAC 40 gave back 0.16 per cent.
In Asia, Japan’s Nikkei closed 2.46 per cent higher, while Hong Kong’s Hang Seng advanced 1.05 per cent.
Commodities
Oil prices were lower, under pressure from skepticism that a U.S. and Chinese trade deal framework would immediately boost oil demand and after Iraq’s oil minister confirmed an oilfield fire had not affected the OPEC member’s oil exports.
Brent crude futures declined nearly 0.4 per cent to US$65.70 a barrel. West Texas Intermediate (WTI) crude futures slid 0.4 per cent to US$61.26.
“Oil market participants are much more skeptical of trade deals than their equity counterparts. A bright negotiating atmosphere does not immediately mean demand,” said PVM Oil Associates analyst John Evans.
In other commodities, spot gold was down 2 per cent at US$4,029.69 an ounce. U.S. gold futures for December delivery lost 2.3 per cent to US$4,042.80.
Currencies and bonds
The Canadian dollar strengthened against its U.S. counterpart.
The day range on the loonie was 71.35 US cents to 71.58 US cents in early trading. The Canadian dollar was down about 0.47 per cent against the greenback over the past month.
The U.S. dollar index, which weighs the greenback against a group of currencies, dropped 0.13 per cent to 98.82.
The euro climbed 0.09 per cent to US$1.1641. The British pound advanced 0.26 per cent to US$1.3347.
In bonds, the yield on the U.S. 10-year note was little changed at 4.022 per cent.
Other corporate news
MEG Energy says Cenovus Energy has further sweetened its takeover offer for the company to $30 per share, ahead of the shareholder vote currently scheduled for Oct. 30.
Economic news
*Note: Scheduled U.S. data reports may not be released if the government shutdown isn’t resolved.
China industrial profits
ECB’s three-year CPI expectations
Germany business climate
(8:30 a.m. ET) Canadian wholesale trade for September.
(8:30 a.m. ET) U.S. durable and core orders for September.
With Reuters and The Canadian Press