Equities
Global markets were mixed as investors assessed what a second Donald Trump presidency could bring and weighed the impact of Canadian inflation data and U.S. retail sales figures.
Canada’s main stock index opened higher after data showed annual inflation eased more than expected in June, boosting hopes for another rate cut by the Bank of Canada next week. The Toronto Stock Exchange’s S&P/TSX composite index was up 0.26 per cent at 22,810.07 at the bell.
Wall Street’s main indexes also advanced at the open as bets continued for a September interest-rate cut by the Federal Reserve, even as strong retail sales data signalled a resilient U.S. economy.
The Dow Jones Industrial Average rose 0.13 per cent to 40,263.78, the S&P 500 gained 0.23 per cent to 5,644.09, and the Nasdaq Composite climbed 0.33 per cent to 18,534.27 at the opening bell.
On Wall Street, markets are watching earnings from Bank of America and Morgan Stanley.
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“All in all, uncertainties loom as equity markets on both sides of the Atlantic Ocean continue to flirt with record high levels,” wrote Ipek Ozkardeskaya, senior analyst at Swissquote Bank. “... Retail sales [figures released today] in the U.S. are expected to have fallen 0.2 per cent in June. Such weakness would back the Fed’s easing inflation story and further reinforce the expectation of a September Fed cut.”
But U.S. retail sales were unchanged in June and the underlying trend was strong, which could boost economic growth estimates for the second quarter.
Overseas, the pan-European STOXX 600 was down 0.47 per cent in morning trading. Britain’s FTSE 100 slipped 0.38 per cent, Germany’s DAX gave back 0.51 per cent and France’s CAC 40 slid 0.83 per cent.
In Asia, Japan’s Nikkei closed 0.2 per cent higher, while Hong Kong’s Hang Seng fell 1.6 per cent.
Commodities
Oil prices dipped on worries of a slowing Chinese economy crimping demand and despite a growing consensus the U.S. Federal Reserve could begin cutting its key interest rate as soon as September.
Brent futures were down 1.73 per cent to US$83.38 a barrel, while U.S. West Texas Intermediate (WTI) crude fell 1.98 per cent to US$80.29.
The weaker Chinese economic data “cast some doubts on whether market participants are being overly optimistic” regarding China’s oil demand outlook, IG market strategist Yeap Jun Rong wrote.
In other commodities, spot gold rose 0.7 per cent to US$2,440.01 an ounce, after prices yesterday hit their highest level since May 20, when bullion scaled a record peak of US$2,449.89.
Currencies and bonds
The Canadian dollar weakened against its U.S. counterpart, which inched away from five-week lows.
The day range on the loonie was 72.94 US cents to 73.18 US cents in early trading. The Canadian dollar was up about 0.29 per cent against the greenback over the past month.
The U.S. dollar index, which weighs the greenback against a group of currencies, advanced 0.24 per cent to 104.45.
The euro slid 0.13 per cent to US$1.0882. The British pound fell 0.17 per cent to US$1.2946.
In bonds, the yield on the U.S. 10-year note was last down at 4.211 per cent.
Economic news
Euro area trade surplus for May, plus Germany business confidence survey and Italy CPI for June
8:15 am ET: Canada housing starts for June, which fell more than expected from May, declining 9 per cent.
8:30 am ET: Canada consumer price index for June, which slowed more than expected to an annual 2.7 per cent, compared with estimates of 2.8 per cent.
8:30 am ET: U.S. retail sales for June, which were unchanged compared with the forecast decline of 0.2 per cent.
8:30 am ET: U.S. import prices
10 am ET: U.S. NAHB housing market index for July
10 am ET: U.S. business inventories.
With Reuters and The Canadian Press