Equities
Global markets climbed as investor optimism over robust earnings growth and enthusiasm over AI offset concern about another flare-up in Middle East tensions that boosted oil.
Wall Street extended gains after data showed the U.S. economy unexpectedly shed jobs in July, dampening expectations of an interest-rate hike in September.
TSX futures were in positive territory as investors assessed hotter than expected jobs numbers for July.
In Canada, investors are getting results from Algonquin Power & Utilities Corp., Emera Inc. and MDA Space Ltd.
On Wall Street, markets are watching earnings from Take-Two Interactive Software, Inc. and PPL Corp.
Traders are split over whether or not the U.S. Federal Reserve will raise rates next month, meaning today’s non-farm payrolls number could be instrumental in tipping the balance in one direction or another.
“With yields and inflation still the key risks for stocks, we expect Friday’s NFP to trade as a ’good news is bad news’ print,” said Michael Feroli, chief U.S. economist at JPMorgan, adding that a strong jobs number would reinforce higher-for-longer pricing and put upward pressure on rates.
Conversely, equities may respond positively to a soft payrolls report as yields ease and policy expectations shift toward a dovish path, he added.
Wall Street’s week ahead: Inflation data to test record-setting U.S. stocks, Fed rate views
Overseas, the pan-European STOXX 600 was up 0.78 per cent in morning trading. Britain’s FTSE 100 rose 0.59 per cent, Germany’s DAX gained 1.14 per cent and France’s CAC 40 advanced 0.48 per cent.
In Asia, Japan’s Nikkei closed 0.12 per cent lower, while Hong Kong’s Hang Seng climbed 0.54 per cent.
Commodities
Oil prices turned lower as investors weighed signals that Gulf states and Iran were closing in on a deal to reopen the Strait of Hormuz under a temporary arrangement aimed at allowing for broader talks to bring the Iran war to a close.
Brent crude futures were down 1.02 per cent to US$81.65 a barrel. West Texas Intermediate (WTI) futures declined 0.8 per cent to US$76.68.
Prices are reacting to Iran’s published draft plan for Hormuz transit conditions, said Rystad Energy analyst Lin Ye.
“That’s not the market pricing in a bad deal, it’s pricing in confirmation that whatever emerges is a managed/conditional corridor, not a restoration of normal flow,” she added.
In other commodities, spot gold was up 2.1 per cent to US$4,326.59 an ounce after hitting a seven-week high yesterday. Prices have gained more than 7 per cent for the week so far. U.S. gold futures rose 2 per cent to US$4,386.10.
Currencies and bonds
The Canadian dollar strengthened against its U.S. counterpart.
The day range on the loonie was 71.27 US cents to 71.72 US cents in early trading. The Canadian dollar was up about 1.45 per cent against the greenback over the past month.
The U.S. dollar index, which weighs the greenback against a group of currencies, dropped 0.5 per cent to 99.44. The dollar was pegged at $1.3953.
The euro rose 0.39 per cent to US$1.1571. The British pound gained 0.3 per cent to US$1.3497.
In bonds, the yield on the U.S. 10-year note was last down at 4.629 per cent.
Economic news
China’s trade surplus, CPI and PPI
Japan’s household spending
Germany’s industrial production and trade surplus
8:30 a.m. ET: Canadian employment for July. The economy added 75,000 jobs compared with estimates of 15,000. The unemployment rate notched down to 6.4 per cent compared with forecasts that it would remain unchanged at 6.5 per cent.
8:30 a.m. ET: U.S. nonfarm payrolls for July, which unexpectedly fell 23,000 while the unemployment rate eased to 4.1 per cent. Consensus had been for a gain of 86,000 jobs with the unemployment rate staying at 4.2 per cent.
10 a.m. ET: Canada’s Ivey PMI for July.
3 p.m. ET: U.S. consumer credit for June.
With Reuters and The Canadian Press