Equities
Global markets turned lower as the European Central Bank raised interest rate as expected, and a wave of attacks in the Middle East left investors nervous ahead of U.S. inflation data that will influence monetary policy there.
Wall Street’s main indexes were set for a lower open after data reinforced concerns that price pressures were rising faster than expected.
TSX futures followed sentiment lower.
In Canada, investors are getting results from Empire Co. Ltd., Descartes Systems Group Inc., Transat A.T. Inc. and Groupe Dynamite Inc.
Sobeys parent Empire reported growth in sales and profits in the first quarter, Susan Krashinsky Robertson writes, as the company continued to expand its grocery locations across the country and cut costs.
Transat fell to a loss in the third quarter and borrowed more money from the federal government as the Montreal-based leisure carrier faced soaring fuel costs amid the war in Iran, Eric Atkins reports.
On Wall Street, markets are watching earnings from Oracle Corp., Adobe Inc. and Macy’s Inc.
“European Central Bank (ECB) officials are expected to raise rates by another 25 [basis points] today, as the renewed surge in energy prices pushed headline inflation back above 3 per cent in the euro area,” Ipek Ozkardeskaya, senior analyst at Swissquote, wrote earlier in a note.
“The bad news is that higher borrowing costs weigh on valuations. But the good news is that this week’s potential 25bp hike is almost entirely priced in.”
Overseas, the pan-European STOXX 600 was down 0.59 per cent. Britain’s FTSE 100 fell 0.4 per cent, Germany’s DAX declined 0.68 per cent and France’s CAC 40 slid 0.36 per cent.
In Asia, Japan’s Nikkei closed 0.2 per cent higher, while Hong Kong’s Hang Seng dropped 1.27 per cent.
Commodities
Oil prices continued to climb as Brent crude remained above US$100 a barrel and traders braced for deeper supply disruptions after Iran and the United States launched their largest attacks on shipping since their six-month-old conflict began.
Brent crude futures rose almost 4 per cent to US$105.20 a barrel. West Texas Intermediate (WTI) crude traded at US$100.20, up 4.36 per cent.
Brent prices have surged roughly 30 per cent from lows touched in early August as a permanent agreement between the U.S. and Iran to cease attacks has not materialized and fighting resumed later in the month.
“Renewed hostilities between the U.S. and Iran, after nearly a month of relative calm, have once again lifted the geopolitical risk premium in crude oil,” said Sugandha Sachdeva, the founder of SS WealthStreet, a New Delhi-based research firm.
In other commodities, spot gold dropped 0.4 per cent at US$4,385.40 an ounce. U.S. gold futures for December delivery fell 0.7 per cent to US$4,427.80.
Currencies and bonds
The Canadian dollar weakened against its U.S. counterpart.
The day range on the loonie was 72.27 US cents to 72.48 US cents in early trading. The Canadian dollar was up about 0.7 per cent against the greenback over the past month. It traded at $1.3830 per US$1.
The U.S. dollar index, which weighs the greenback against a group of currencies, rose 0.28 per cent to 99.09.
The euro declined 0.26 per cent to US$1.1605. The British pound fell 0.35 per cent to US$1.3501.
In bonds, the yield on the U.S. 10-year note was last up at 4.918 per cent.
Economic news
ECB’s monetary policy meeting. The European central bank raised interest rates by 25 basis points as expected to 2.5 per cent.
Germany’s CPI
8:30 a.m. ET: U.S. initial jobless claims for week of Sept. 5, which dipped to 206,000 compared with consensus estimate of 208,000.
8:30 a.m. ET: U.S. PPI for August, which rose 5.4 per cent from a year ago, up from an annualized 4.7 per cent in July. Wholesale prices rose 0.4 per cent month-over-month, in line with expectations.
10 a.m. ET: U.S. existing home sales for August.
10 a.m. ET: U.S. wholesale trade for July.
With Reuters and The Canadian Press