Equities
Global markets were mixed amid concern about the rising chances of a U.S. rate hike this year and optimism over the reopening of the Strait of Hormuz after the U.S. and Iran signed an agreement to end the war.
Wall Street futures pointed up after major North American markets closed lower yesterday on the Fed’s commentary. U.S. stock and bond markets will be closed tomorrow for a holiday.
TSX futures followed sentiment higher.
In Canada, investors are getting results from Empire Co. Ltd. As Susan Krashinsky Robertson reports, the Sobeys parent has announced a plan to accelerate investments in its retail network, opening more new stores and renovating others. It also raised its quarterly dividend to 24.25 cents from 22 cents.
On Wall Street, markets are watching earnings from Accenture PLC and Kroger Co.
“Leaving the market without forward guidance means that Fed decisions in [chair Kevin Warsh’s] era will be less predictable and will come as a surprise, which will undoubtedly inject volatility into financial markets,” Swissquote senior analyst Ipek Ozkardeskaya wrote in a note
Overseas, the pan-European STOXX 600 was down 0.44 per cent in morning trading. Britain’s FTSE 100 slid 0.78 per cent, Germany’s DAX advanced 0.17 per cent and France’s CAC 40 edged up 0.06 per cent.
In Asia, Japan’s Nikkei closed 1.65 per cent higher, while Hong Kong’s Hang Seng dropped 1.59 per cent.
Commodities
Oil prices sank after the U.S. and Iran signed an interim pact that would end the war, reopen the Strait of Hormuz and waive U.S. sanctions on Tehran’s oil, boosting the oil supply outlook.
Brent crude futures were down 1.3 per cent at US$78.51 a barrel. West Texas Intermediate (WTI) fell 2 per cent to US$75.25 a barrel.
“The selloff extended as energy markets continued to aggressively price in a faster-than-expected return of Iranian barrels following the recent U.S.-Iran memorandum of understanding,” IG market analyst Tony Sycamore said in a note.
In other commodities, spot gold was down 0.3 per cent to US$4,25.99 an ounce after declining 1.7 per cent yesterday after the U.S. Fed pointed to a potential rate hike later this year. U.S. gold futures for August delivery fell 2.6 per cent to US$4,265.50.
Currencies and bonds
The Canadian dollar weakened against its U.S. counterpart.
The day range on the loonie was 70.74 US cents to 70.95 US cents in early trading. The Canadian dollar was down about 2.4 per cent against the greenback over the past month.
The U.S. dollar index, which weighs the greenback against a group of currencies, rose 0.59 per cent to 100.68. The dollar was pegged at $1.4115.
The euro eased 0.24 per cent to US$1.1474. The British pound declined 0.45 per cent to US$1.3233.
In bonds, the yield on the U.S. 10-year note was last down at 4.443 per cent.
Economic news
The Bank of England has held its main interest rate at 3.7 per cent after data showed inflation did not rise as had been expected in May.
8:30 a.m. ET: Canadian industrial product price and raw materials indexes
8:30 a.m. ET: U.S. initial jobless claims for last week, which dropped 4,000 to a seasonally adjusted 226,000 as layoffs remained low.
With Reuters and The Canadian Press