Equities
Global markets took a breather as oil prices retreated from a four-month high, though the recent surge in energy costs continued to fuel inflation worries and expectations that central banks may need to tighten policy.
Wall Street futures trimmed gains investors eyed key inflation numbers for August, which were in line with expectations.
TSX futures followed sentiment higher.
On Wall Street, markets are watching earnings from Kroger Co.
Analysts at JPMorgan now expect eight of the nine developed-market central banks to hike interest rates by the year end, including the Fed, BOJ, all four central banks in Europe, and the reserve banks of Australia and New Zealand.
“The tightening is for now expected to remain shallow, but risks to our forecasts lean in the direction of more action in the face of resilient growth, sticky core inflation, and commodity price pressures,” they said in a note.
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Overseas, the pan-European STOXX 600 was up 0.84 per cent in morning trading. Britain’s FTSE 100 rose 0.92 per cent, Germany’s DAX gained 0.71 per cent and France’s CAC 40 advanced 0.92 per cent.
In Asia, Japan’s Nikkei closed 1.93 per cent lower, while Hong Kong’s Hang Seng dropped 0.6 per cent.
Commodities
Oil prices eased but but were still on track for a weekly gain of more than 8 per cent and U.S. diesel prices hit a record high as attacks along key Middle East shipping routes stoked prolonged supply disruption fears.
Brent crude futures fell 2.9 per cent to US$104.50 a barrel. West Texas Intermediate (WTI) crude dropped 3.08 per cent to US$99.32 a barrel.
“Some headlines of possible new talks in the Middle East are weighing moderately on oil prices today,” said UBS energy analyst Giovanni Staunovo, adding: “I keep seeing near-term risks to the upside for oil prices, but we should expect ongoing high price volatility too”.
In other commodities, spot gold was up 0.6 per cent to US$4,339.48 an ounce. U.S. gold futures for December delivery slid 0.6 per cent to US$4,381.30.
Currencies and bonds
The Canadian dollar weakened against its U.S. counterpart.
The day range on the loonie was 72.01 US cents to 72.33 US cents in early trading. The Canadian dollar was up about 0.08 per cent against the greenback over the past month. It traded at $1.3863 per US$1.
The U.S. dollar index, which weighs the greenback against a group of currencies, rose 0.02 per cent to 99.07.
The euro slid 0.06 per cent to US$1.1605. The British pound rose 0.07 per cent to US$1.3520.
In bonds, the yield on the U.S. 10-year note was last down at 4.921 per cent.
Economic news
8:30 a.m. ET: Canada’s National Balance Sheet and Financial Flow Accounts (Q2).
8:30 a.m. ET: U.S. CPI for August, which increased 0.4 per cent last month and 3.4 per cent on a year-over-year basis, in line with estimates.
10 a.m. ET: U.S. University of Michigan’s consumer sentiment survey for September.
2 p.m. ET: U.S. budget balance for August.
With Reuters and The Canadian Press