Equities
Global markets saw modest gains as investors assessed key U.S. inflation data that could signal whether the Federal Reserve stays on track for an interest rate cut next month.
Wall Street’s main indexes opened slightly higher after data showed inflation was moderating as expected, cementing bets that the Fed will begin its policy-easing cycle in September.
The Dow Jones Industrial Average rose 0.09 per cent to 39,800.59, the S&P 500 advanced 0.15 per cent to 5,442.36, and the Nasdaq Composite gained 0.23 per cent to 17,227.64 at the bell.
The Toronto Stock Exchange’s S&P/TSX composite index followed suit, opening up 0.05 per cent at 22,637.64.
In Canada, investors are getting results from Hydro One Ltd., Metro Inc. and Northland Power Inc.
On Wall Street, markets are watching earnings from Cisco Systems Inc. and UBS Group,
“Risk will find buyers if additional implied rate cuts are driven by a reduced inflation dynamic,” said Chris Weston, head of research at Pepperstone. “However, the opposite is true if any additional rate cuts are driven by weaker growth or poor labour market readings.”
Overseas, the pan-European STOXX 600 was 0.30 per cent higher in morning trading. Britain’s FTSE 100 rose 0.32 per cent, Germany’s DAX gained 0.5 per cent and France’s CAC 40 advanced 0.5 per cent.
In Asia, Japan’s Nikkei closed 0.58 per cent higher, while Hong Kong’s Hang Seng slid 0.35 per cent.
Commodities
Oil prices were broadly steady, as concerns that conflict may spread in the Middle East and threaten production in one of the world’s major regions for crude production eased slightly..
Brent crude futures slid 0.1 per cent to US$80.59 a barrel, while West Texas Intermediate (WTI) crude declined 0.2 per cent to US$78.16 a barrel.
“The recent rally in crude came to a halt yesterday with prices falling back as fears of a retaliatory attack on Israel by Iran receded, with the risk premium slashed,” said Ashley Kelty, an analyst at Panmure Liberum.
In other commodities, gold prices fell in a volatile trade after the U.S. inflation data poured water on expectations for a sizeable rate cut from the Fed.
Spot gold fell 0.4 per cent to US$2,455.91 an ounce, while U.S. gold futures slipped 0.5 per cent to US$2,494.50.
Currencies and bonds
The Canadian dollar weakened against its U.S. dollar counterpart.
The day range on the loonie was 72.87 US cents to 73.00 US cents in early trading. The Canadian dollar was down about 0.18 per cent against the greenback over the past month.
The U.S. dollar index, which weighs the greenback against a group of currencies, declined 0.03 per cent to 102.54.
The euro advanced 0.4 per cent to US$1.1039. The British pound slid 0.09 per cent to US$1.2852.
In bonds, the yield on the U.S. 10-year note was last up at 3.851 per cent ahead.
Other corporate news
UBS has agreed to sell Credit Suisse’s U.S. mortgage servicing business, CFO Todd Tuckner said on an analysts’ call after the banking giant released better-than-expected quarterly results. He did not name the buyer.
Family-owned candy giant Mars, whose brands include M&M’s and Snickers, is reportedly nearing a deal to acquire Kellanova, maker of snacks such as Cheez-It and Pringles, for nearly US$30-billion.
Economic news
Euro area GDP for the second quarter and June industrial production
France and Britain release July inflation reports. British inflation rose less than expected, strengthening bets that the Bank of England will cut interest rates in the next policy meeting.
8:30 a.m. ET: U.S. consumer prices for July.
With Reuters and The Canadian Press