Equities
Global markets were mixed after U.S. President Donald Trump unveiled a fresh round of punishing tariffs and as traders pared bets of sharp U.S. rate cuts following stronger-than-expected economic data.
Trump announced the U.S. would impose 100 per cent duties on imported branded drugs, 25 per cent tariffs on heavy-duty trucks and 50 per cent tariffs on kitchen cabinets.
U.S. stock index futures extended gains after an in-line inflation reading reinforced expectations that the Federal Reserve may proceed with interest rate cuts this year.
TSX futures pointed down ahead of the news that Canada’s GDP rebounded from three months of contraction to grow by 0.2 per cent in July as mining, manufacturing and wholesale trade boosted growth, data showed.
“That U.S. growth report yesterday was just a bit too strong for investors’ liking,” Ipek Ozkardeskaya, senior analyst at Swissquote Bank, wrote in a note. “On the surface, strong GDP should be good news but the problem is, such strong growth doesn’t support further Federal Reserve rate cuts, and it could even boost inflation expectations on top of potential tariff-led pressures.”
The Final Countdown: World market themes for the week ahead
Wall Street Week Ahead: Investors look to jobs data to support rate-cut path, pricey stock market
Overseas, the pan-European STOXX 600 was up 0.45 per cent in morning trading. Britain’s FTSE 100 rose 0.53 per cent, Germany’s DAX gained 0.38 per cent and France’s CAC 40 advanced 0.62 per cent.
In Asia, Japan’s Nikkei closed 0.87 per cent lower, while Hong Kong’s Hang Seng fell 1.35 per cent.
Commodities
Oil prices were steady, on track to climb more than 4 per cent for the week, as Ukraine’s attacks on Russia’s energy infrastructure prompted Moscow to curb fuel exports.
Brent futures lost 3 US cents to trade at US$69.39 a barrel. West Texas Intermediate (WTI) crude futures was down 6 US cents to US$64.92.
“The geopolitical risk premium, which has been steadily building over the last two months as Ukrainian drone strikes intensified, has now materialized into an actual supply shortage, much to the detriment of Europe, which is structurally short of distillates,” said PVM analyst Tamas Varga.
In other commodities, spot gold held its ground at US$3,749.24 an ounce. U.S. gold futures for December delivery rose 0.2 per cent to US$3,779.40.
Currencies and bonds
The Canadian dollar weakened against its U.S. counterpart.
The day range on the loonie was 71.63 US cents to 71.82 US cents in early trading. The Canadian dollar was up/down about 1.5 per cent against the greenback over the past month.
The U.S. dollar index, which weighs the greenback against a group of currencies, slid 0.12 per cent to 98.44.
The euro rose 0.1 per cent to US$1.1678. The British pound gained 0.09 per cent to US$1.3356.
In bonds, the yield on the U.S. 10-year note was last down at 4.164 per cent.
Economic news
Tokyo CPI
ECB’s three-year CPI expectations
(8:30 a.m. ET) Canada’s monthly real GDP for July, which showed 0.2-per-cent growth after three months of contraction.
(8:30 a.m. ET) Canadian wholesale trade for August.
(8:30 a.m. ET) U.S. personal spending for August, which increased 0.6 per cent, slightly more than expected compared with the 0.5 per cent estimate.
(8:30 a.m. ET) U.S. core PCE price index for August, which increased 0.3 per cent In the 12 months through August, the PCE Price Index advanced 2.7 per cent. The Street was projecting a rise of 0.2 per cent from July and up 2.9 per cent year-over-year.
(10 a.m. ET) U.S. University of Michigan Consumer Sentiment Index for September.
Also: Ottawa’s budget balance for July.
With Reuters and The Canadian Press