Equities
Global markets were on the rise as investors bet the U.S. Federal Reserve is finally getting the jump on inflation, delivering its first rate hike in more than three years and calming a global bond selloff that had sent long-term yields soaring.
Wall Street futures were in positive territory after major North American markets closed down yesterday.
TSX futures followed sentiment higher.
Tai Hui, APAC chief market strategist at JPMorgan Asset Management, said investors would need to reassess the valuations for assets especially tech stocks if the Fed remained hawkish going into 2027.
“We think the chance of U.S. policy rates returning to above 5 per cent is still limited. Nonetheless, a catalyst to extend the equity bull market is looking unlikely in the foreseeable future,” he added.
Overseas, the pan-European STOXX 600 was up 0.86 per cent. Britain’s FTSE 100 rose 0.8 per cent, Germany’s DAX advanced 0.87 per cent and France’s CAC 40 climbed 0.73 per cent.
In Asia, Japan’s Nikkei closed 0.33 per cent higher, while Hong Kong’s Hang Seng declined 0.44 per cent.
Commodities
Oil prices fell on reports of Saudi Arabia offering extra crude cargoes through Oman, which reduced fears of supply disruptions, but stayed above US$100 on concerns about the Middle East conflict expanding.
Brent crude futures dropped 3.5 per cent to US$102.10 a barrel. West Texas Intermediate (WTI) futures were down 2.66 per cent at US$99.71 a barrel.
“Concerns over supply tightness eased slightly following news that Saudi Arabia would ship cargo via Oman,” said Hiroyuki Kikukawa, chief strategist of Nissan Securities Investment, a unit of Nissan Securities.
“Expectations of progress toward easing tensions in the Middle East ahead of the U.S.-China summit next week are also capping price gains,” he added.
In other commodities, spot gold was up 1.8 per cent at US$4,339.53 an ounce. U.S. gold futures for December delivery were down 0.2 per cent to US$4,379.30.
Currencies and bonds
The Canadian dollar strengthened against its U.S. counterpart.
The day range on the loonie was 71.41 US cents to 71.53 US cents in early trading. The Canadian dollar was down about 1.38 per cent against the greenback over the past month. It traded at $1.3988 per US$1.
The U.S. dollar index, which weighs the greenback against a group of currencies, dropped 0.13 per cent to 100.12.
The euro gained 0.25 per cent to US$1.1493. The British pound was up 0.03 per cent to US$1.3383.
In bonds, the yield on the U.S. 10-year note was last down at 4.955 per cent.
Economic news
Bank of Japan’s monetary policy meeting (through Friday)
Euro zone’s CPI
Bank of England’s monetary policy announcement. The BoE held rates steady at 3.75 per cent.
8:30 a.m. ET: Canada’s industrial product and raw materials price indexes for August.
8:30 a.m. ET: Canada’s new housing price index for August. Estimates are declines of 0.1 per cent from July and 2.1 per cent year-over-year.
8:30 a.m. ET: Canada’s international securities transactions for July.
8:30 a.m. ET: U.S. initial jobless claims for week of Sept. 11. Estimate is 208,000, up 2,000 from the previous week.
8:30 a.m. ET: U.S. housing starts for August. Consensus is an annualized rate rise of 6.4 per cent.
8:30 a.m. ET: U.S. building permits for August. The Street is projecting a decline of 2.0 per cent on an annualized rate basis
8:30 a.m. ET: U.S. Philadelphia Fed Index for September.
10 a.m. ET: U.S. pending home sales for August.
With Reuters and The Canadian Press