Equities
Global markets slid after a major escalation in the U.S. and Israel’s war with Iran rattled investors.
Wall Street futures were in the red after major North American markets closed sharply down yesterday in the wake of hawkish central bank commentary.
TSX futures followed sentiment lower.
In Canada, investors are getting results from Premium Brands Holdings Corp.
On Wall Street, markets are watching earnings from Alibaba Group Holding Ltd., Accenture PLC, FedEx Corp. and Darden Restaurants Inc.
“This latest escalation feels like a turning point for markets because the conflict is no longer just about military headlines or Strait of Hormuz closure,” said Charu Chanana, chief investment strategist at Saxo in Singapore.
“It is now hitting the plumbing of the global energy system. What is unsettling markets now is the growing stagflation risk... It means this is no longer just a geopolitical story but a macro one."
Overseas, the pan-European STOXX 600 was down 1.81 per cent in morning trading. Britain’s FTSE 100 fell 1.9 per cent, Germany’s DAX dropped 2.11 per cent and France’s CAC 40 gave back 1.48 per cent.
In Asia, Japan’s Nikkei closed 3.38 per cent lower, while Hong Kong’s Hang Seng fell 2.02 per cent.
Commodities
Oil prices pared some earlier gains after Iran attacked energy facilities across the Middle East following Israel’s strike on its South Pars gas field, a major escalation in the war.
Brent futures rose 5.9 per cent to US$113.70 a barrel. U.S. West Texas Intermediate (WTI) crude edged up 0.06 per cent to US$96.38 a barrel.
“Escalation in the Middle East, precise attacks on oil infrastructure, and the death of Iranian leadership all point to a prolonged disruption in oil supplies,” Phillip Nova analyst Priyanka Sachdeva said in a note.
“Adding fuel to the fire, the Federal Reserve served ‘steady rates’ with a hawkish narrative, pointing to the economic concerns that follow a war.”
In other commodities, spot gold fell 2.2 per cent to US$4,710.88 an ounce, its lowest since Feb. 6. U.S. gold futures for April delivery dropped 3.6 per cent to US$4,721.40.
Currencies and bonds
The Canadian dollar weakened against its U.S. counterpart.
The day range on the loonie was 72.73 US cents to 72.94 US cents in early trading. The Canadian dollar was down about 0.42 per cent against the greenback over the past month.
The U.S. dollar index, which weighs the greenback against a group of currencies, was little changed at 100.08.
The euro advanced 0.2 per cent to US$1.1475. The British pound gained 0.19 per cent to US$1.3282.
In bonds, the yield on the U.S. 10-year note was last up at 4.279 per cent.
Economic news
The Bank of Japan held interest rates steady but maintained its bias for tighter monetary policy, warning that surging oil prices driven by the Middle East conflict could exacerbate inflationary pressures.
ECB monetary policy announcement
Bank of England monetary policy announcement
7 a.m. ET: Canada’s CFIB Business Barometer for March.
8:30 a.m. ET: Canadian construction investment for January.
8:30 a.m. ET: Canada’s household and mortgage credit for January.
8:30 a.m. ET: U.S. initial jobless claims for week of March 14. Estimate is 215,000, up 2,000 from the previous week.
10 a.m. ET: U.S. new home sales for January. Consensus is an annualized rate decline of 2.7 per cent.
10 a.m. ET: U.S. wholesale and retail inventories for January.
12 p.m. ET: U.S. funds flow for Q4.
With Reuters and The Canadian Press