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Equities

Global markets were lower with investors wary of making big bets ahead of tomorrow’s U.S. inflation numbers and Federal Reserve rate policy decision, as they tried to gauge when the central bank would start cutting rates and by how much.

U.S. stock indexes opened lower on the cautious sentiment. The Dow Jones Industrial Average fell 0.19 per cent to 38,795.71, the S&P 500 slid 0.15 per cent to 5,353, and the Nasdaq Composite dropped 0.19 per cent to 17,160.42 at the opening bell.

In Canada, the S&P/TSX Composite index followed suit, falling 0.5 per cent to 21,965.78 points at the open.

“We think the leadership would prefer a two-cut baseline [this year] to retain flexibility, but a one-cut baseline is a possible risk, especially if core [consumer price index] surprises to the upside on Wednesday,” Goldman Sachs analysts said in a note. The Fed is expected to hold rates steady tomorrow.

Overseas, the pan-European STOXX 600 was 0.74 per cent lower in morning trading. Britain’s FTSE 100 fell 0.94 per cent, Germany’s DAX slid 0.72 per cent and France’s CAC 40 was down 1.1 per cent.

In Asia, Japan’s Nikkei closed 0.25 per cent higher at 39,134.79, while Hong Kong’s Hang Seng dropped 1.09 per cent to 18,176.34.

Commodities

Oil prices were largely steady as OPEC stuck to its forecast for relatively strong growth in global oil demand in 2024, despite lower than expected use in the first quarter.

Brent crude futures fell 0.1 per cent to US$81.67 per barrel and U.S. West Texas Intermediate (WTI) crude futures slipped 0.1 per cent to US$77.69.

In other commodities, spot gold was down 0.2 per cent at US$2,307.10 an ounce, while U.S. gold futures fell 0.1 per cent to US$2,324.

Currencies and bonds

The Canadian dollar weakened against its U.S. counterpart.

The day range on the loonie was 72.57 US cents to 72.70 US cents in the early premarket period. The Canadian dollar was down about 0.87 per cent against the greenback over the past month.

The U.S. dollar index, which weighs the greenback against a group of currencies, advanced 0.1 per cent to 105.25.

The euro hit a one-month low in fallout from the weekend’s elections and was last down 0.3 per cent to US$1.0731. The British pound slipped 0.06 per cent to US$1.2722.

In bonds, the yield on the U.S. 10-year note dipped to 4.435 per cent ahead of the North American opening bell.

Economic news

Japan machine tool orders

(8:30 a.m. ET) Canadian building permits for April. Statistics Canada says the value of permits increased month-over-month by 20.5 per cent.

(10 a.m. ET) U.S. quarterly services survey for Q1.

Also: U.S. Fed meeting begins.

With Reuters and The Canadian Press

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