Equities
Markets were in negative territory following France’s decision to call a snap election and ahead of U.S. inflation figures and the Federal Reserve’s policy decision on Wednesday.
U.S. stocks indexes edged lower at the open as investors grew cautious, looking for hints on the central bank’s policy-easing stance this year. The Dow Jones Industrial Average fell 14.09 0.04 per cent at the bell to 38,784.90., the S&P 500 slid 0.11 per cent at 5,341.22, and the Nasdaq Composite dropped 0.29 per cent to 17,083.45 at the bell.
Canada’s main stock index followed sentiment lower as gains in materials and energy stocks from higher commodity prices were offset by investor caution. At the open S&P/TSX composite index was down or 0.05 per cent at 21,997.08.
In Canada, investors will be watching for details on the capital gains tax changes as Finance Minister Chrystia Freeland introduces the motion today in the House of Commons.
As The Globe’s Marieke Walsh reports, Ottawa isn’t changing the broad strokes of hiking the tax’s inclusion rate, despite a pressure campaign from top business groups that say it will hurt the economy.
Investors are also getting first-quarter results from retailer Roots Corp.
“The market moves are all about what we are seeing in a European context – and news from France has caused a risk premium around European assets,” said BlueBay Asset Management chief investment officer Mark Dowding.
The pan-European STOXX 600 was 0.5 per cent lower in morning trading. Britain’s FTSE 100 slid 0.26 per cent, Germany’s DAX fell 0.56 per cent and France’s CAC 40 dropped 1.54 per cent.
In Asia, Japan’s Nikkei closed 0.92 per cent higher at 39,038.16, while Hong Kong was among the markets closed for a holiday.
Commodities
Oil prices edged up, aided by hopes of rising fuel demand this summer, though gains were capped by the stronger dollar.
Brent crude futures gained 25 US cents to US$79.77 a barrel, while U.S. West Texas Intermediate (WTI) crude futures advanced 12 cents to US$75.71 per barrel.
“We believe current market positioning is overly pessimistic, considering that we expect larger oil inventory declines over the next few weeks,” UBS analysts said in a report.
In other commodities, spot gold was up 0.5 per cent at US$2,304.92 an ounce, while U.S. gold futures fell 0.1 per cent to US$2,323.20.
Currencies and bonds
The Canadian dollar weakened against its U.S. counterpart, which jumped on Friday’s strong labour data.
The day range on the loonie was 72.56 US cents to 72.71 US cents in the early premarket period. The Canadian dollar was down about 0.8 per cent against the greenback over the past month.
The U.S. dollar index, which weighs the greenback against a group of currencies, rose 0.37 per cent to 105.28.
The euro fell 0.6 per cent to a one-month low at US$1.0733. The British pound declined almost 0.1 per cent to US$1.2707.
In bonds, the yield on the U.S. 10-year note firmed to 4.471 per cent ahead of the North American opening bell.
Other corporate news
Roots Corp. says it lost $8.9-million in the first quarter compared with a loss of $8-million in the same quarter last year. Sales totalled $37.5-million, down 9.6 per cent from $41.5-million a year ago.
Economic news
China aggregate yuan financing and new yuan loans
Japan real GDP and banking lending
Italy industrial production
With Reuters and The Canadian Press