Equities
Global markets eased as escalating tensions in the Middle East clouded the outlook for an imminent deal to open the Strait of Hormuz, adding to concerns about the health of the global economy.
Wall Street futures were muted as investors assess U.S. inflation data for April that rose at its fastest pace in three years.
TSX futures followed sentiment lower.
Bank earnings continue to roll out today from Royal Bank of Canada, Toronto-Dominion Bank and Canadian Imperial Bank of Commerce.
RBC posted higher second-quarter profit that beat analysts’ estimates, boosted by a surge in capital markets earnings and lower provisions for sour loans, Stefanie Marotta reports. It also raised its quarterly dividend by 12 cents to $1.76 per share.
She also writes that TD posted earnings that topped analysts’ expectations on higher profit from its Canadian banking and capital markets units and raised its quarterly dividend by 4 cents to $1.12.
CIBC reported a 23-per-cent increase in fiscal second-quarter profit that beat analysts’ estimates, and announced a deal to sell its Caribbean division for US$1.6-billion, James Bradshaw writes.
Canadian power sports vehicle maker BRP has restored its financial forecast after pulling it over U.S. tariff changes just six weeks ago, Nicolas Van Praet reports. It expects a significant decline in profit for the coming year compared to its previous outlook even as it pushes to soften the impact of the levies.
On Wall Street, markets are watching earnings from Costco Wholesale Corp., Best Buy Co. Inc., Dell Technologies Inc., Dollar Tree Inc. and Autodesk Inc.
Overseas, the pan-European STOXX 600 was down 0.61 per cent in morning trading. Britain’s FTSE 100 slid 0.82 per cent, Germany’s DAX declined 0.47 per cent and France’s CAC 40 gave back 0.47 per cent.
In Asia, Japan’s Nikkei closed 0.47 per cent lower, while Hong Kong’s Hang Seng dropped 1.27 per cent.
Commodities
Oil prices jumped after Iran’s Revolutionary Guard said it targeted a U.S. airbase in response to a U.S. attack in the port city of Bandar Abbas.
Brent crude futures rose 3 per cent to US$97.14 a barrel, while the more active August contract gained 3.1 per cent to US$95.06. The July contract is set to expire tomorrow.
West Texas Intermediate (WTI) futures were rose 3.1 per cent to US$91.44.
“The rise in oil prices highlights the fragility of the current ‘no peace, no war’ situation between the United States and Iran,” said Simon-Peter Massabni, head of business development at XS.com.
In other commodities, spot gold was down 1.6 per cent at US$4,385.22 an ounce, earlier falling to its lowest level since March 26. U.S. gold futures for June delivery fell 1.4 per cent to US$4,383.30.
Currencies and bonds
The Canadian dollar was little changed against its U.S. counterpart.
The day range on the loonie was 72.09 US cents to 72.30 US cents in early trading. The Canadian dollar was down about 1.86 per cent against the greenback over the past month.
The U.S. dollar index, which weighs the greenback against a group of currencies, slipped 0.04 per cent to 99.16. The dollar was pegged at $1.3839.
The euro gained 0.13 per cent to trade at US$1.1641. The British pound declined 0.03 per cent to US$1.3424.
In bonds, the yield on the U.S. 10-year note was last down at 4.475 per cent.
Other corporate news
Eric Atkins reports that the union that represents track signal workers at Canadian Pacific Kansas City has issued a 72-hour strike notice, the Calgary-based railway said on Wednesday night.
Economic news
Euro zone consumer and economic confidence
ECB minutes from April monetary policy meeting are released
6 a.m. ET: U.S. Conference Board CEO Confidence Index for Q1.
8:30 a.m. ET: Canada’s current account balance for Q1.
8:30 a.m. ET: Canada’s Survey of Employment, Payrolls and Hours for March.
8:30 a.m. ET: U.S. initial jobless claims for week of May 23. Estimate is 213,000, up 4,000 from the previous week.
8:30 a.m. ET: U.S. Real GDP for Q1. Consensus is a 2.1-per-cent annualized increase.
8:30 a.m. ET: U.S. PCE Price Index for April, which came in at an annualized 3.8 per cent, compared with a consensus rise of 3.9 per cent.
8:30 a.m. ET: U.S. personal income and consumption for April. The Street is expecting month-over-month increases of 0.4 per cent for both.
8:30 a.m. ET: U.S. durable and core goods orders for April. The consensus projections are increases of 3.2 per cent and 0.5 per cent from March, respectively.
10 a.m. ET: Bank of Canada’s Financial Stability Report with press conference to follow.
10 a.m. ET: U.S. new home sales for April.
With Reuters and The Canadian Press