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Equities

Global stocks were mostly higher as investors looked to key U.S. economic data that kept intact bets for a Federal Reserve interest-rate cut by September.

The personal consumption expenditures (PCE) price index – the Fed’s preferred inflation indicator – in June nudged up 0.1 per cent, as expected, after being unchanged in May, the Commerce Department said. The index climbed an annualized 2.5 per cent after rising 2.6 per cent in May.

The core PCE price index rose 0.2 per cent last month, following a 0.1-per-cent gain in May.

Wall Street’s main indexes opened higher, with the Nasdaq taking the lead as most megacap tech and chip stocks recovered from the week’s pummelling and the in-line key inflation reading buoyed markets.

The Dow Jones Industrial Average rose 0.52 per cent to 40,140.86, the S&P 500 gained 0.64 per cent to 5,433.67, and the Nasdaq Composite was 0.87 per cent higher at 17,331.95.

The Toronto Stock Exchange’s S&P/TSX composite index advanced 0.49 per cent to 22719.5 at the bell, led by gains in materials sector.

On Wall Street, markets are watching earnings from Bristol-Myers Squibb, Colgate-Palmolive and 3M.

“While a modest upside surprise [in PCE] wouldn’t necessarily derail the path back to the target of inflation, it could impact the expected timing of the first [Fed] cut and the number of cuts that could come over the next six months. That could rattle the markets at a time when sentiment is already a little cautious,” aid Kyle Rodda, a senior market analyst at Capital.com.

Overseas, the pan-European STOXX 600 was up 0.62 per cent in morning trading. Britain’s FTSE 100 gained 0.85 per cent, Germany’s DAX added 0.48 per cent and France’s CAC 40 advanced 0.93 per cent.

In Asia, Japan’s Nikkei closed 0.53 per cent lower, while Hong Kong’s Hang Seng climbed 0.1 per cent.

Commodities

Oil prices were little changed but on track for a third consecutive weekly decline, pressured by muted demand in China and expectations of a Gaza ceasefire deal that could ease Middle East tensions and accompanying supply concerns.

Brent crude futures for September dipped 56 US cents to US$81.81 a barrel, while West Texas Intermediate (WTI) crude for September fell 40 cents to US$77.88.

In other commodities, gold was heading for a weekly loss, even as prices firmed ahead of the key U.S. inflation reading.

Spot gold was up 0.3 per cent to US$2,370.50 an ounce, but has lost 1 per cent for the week. U.S. gold futures climbed 0.8 per cent to US$2,372.20.

“Last week, prices scaled record highs on bets of a September U.S. rate cut. When prices rally in a short span, you see a correction, but we remain bullish on gold,” said ANZ commodity strategist Soni Kumari.

Currencies and bonds

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

The day range on the loonie was 72.29 US cents to 72.42 US cents in early trading. The Canadian dollar was down about 0.97 per cent against the greenback over the past month.

The U.S. dollar index, which weighs the greenback against a group of currencies, was up slightly at 104.42.

The euro advanced 0.14 per cent to US$1.0861. The British pound rose 0.16 per cent to US$1.2872.

In bonds, the yield on the U.S. 10-year note was last down at 4.226 per cent ahead.

Economic news

China industrial profits. Japan CPI

European Central bank three-year CPI expectations. France and Italy consumer confidence

Canadian budget balance.

8:30 am ET: U.S. personal spending and income.

8:30 am ET: U.S. core PCE price index for June.

10 am ET: U.S. University of Michigan consumer sentiment.

With Reuters and The Canadian Press

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