Equities
Global markets advanced as traders assessed July’s reading of the U.S. core personal consumption expenditures [PCE] index, the Federal Reserve’s favoured inflation measure.
Wall Street’s main indexes opened higher as the data showed price pressures rose almost in line with expectations in July, confirming bets on an interest-rate cut next month.
The Dow Jones Industrial Average rose 0.08 per cent to 41,366.16, the S&P 500 gained 0.37 per cent to 5,612.74, and the Nasdaq Composite advanced 0.77 per cent to 17,650.49 at the bell.
The Toronto Stock Exchange’s S&P/TSX composite index opened 0.1 per cent lower at 23,203.05 as rate-cut optimism was countered by major declines in energy stocks.
In Canada, investors are getting results from Canadian Western Bank and Laurentian Bank of Canada. Both banks reported lower profit and higher provisions for loan losses.
“The [PCE] data is expected to hint at a tiny rebound in July,” Ipek Ozkardeskaya, senior analyst at Swissquote Bank, wrote in a note. But “the Fed doves are more interested in jobs data than inflation figures. What would really change the game is … a strong jobs data from the U.S. next week.”
Overseas, the pan-European STOXX 600 was up 0.33 per cent in morning trading. Britain’s FTSE 100 rose 0.36 per cent, Germany’s DAX gained 0.2 per cent and France’s CAC 40 advanced 0.48 per cent.
In Asia, Japan’s Nikkei closed 0.74 per cent higher, while Hong Kong’s Hang Seng rose 1.14 per cent.
Shaky September: World market themes for the week ahead
Commodities
Oil prices steadied as investors weighed supply concerns in Libya and Iraq, although signs of weakened demand, particularly in China, limited gains.
Brent crude futures were up 0.14 per cent at US$78.93, while West Texas Intermediate (WTI) crude futures edged higher to US$75.95.
“Ongoing concerns over dented Libyan supplies were magnified by Iraq’s plans to tame production, which together can dent the global supplies of oil,” said Priyanka Sachdeva, senior market analyst at Phillip Nova.
In other commodities, spot gold was flat at US$2,520.36 an ounce, and U.S. gold futures fell 0.3 per cent to US$2,552.90.
Currencies and bonds
The Canadian dollar strengthened against its U.S. counterpart.
The day range on the loonie was 74.11 US cents to 74.25 US cents in early trading. The Canadian dollar was up/down about 2.94 per cent against the greenback over the past month.
The U.S. dollar index, which weighs the greenback against a group of currencies, rose 0.02 per cent to 101.37.
The euro was edged higher to US$1.1086. The British pound advanced 0.11 per cent to US$1.3183.
In bonds, the yield on the U.S. 10-year note was last down at 3.861 per cent.
Other corporate news
The union representing workers at Canada’s two main rail companies says it has filed four court challenges against a ruling by the country’s industrial labor board that forced them back to work.
The board on Saturday accepted a request from the government to order more than 9,000 Teamsters members back to work at Canadian National Railway and Canadian Pacific Kansas City and to impose binding arbitration.
Economic news
Japan jobless rate, retail sales and industrial production
Euro zone CPI and jobless rate. Inflation fell sharply to 2.2 per cent in August, opening the door for the European Central Bank to cut interest rates.
Germany unemployment and retail sales.
(8:30 a.m. ET) Canada’s real GDP for Q2. The economy grew faster than expected at an annualized 2.1 per centin the second quarter, led by government expenditure, increased business investments and consumers spending higher on services.
(8:30 a.m. ET) Canadian monthly real GDP for June, which was unchanged and an advance estimate for July shows another month of flat growth, Statistics Canada said.
(8:30 a.m. ET) U.S. personal spending and income for June. The Street is forecasting month-over-month gains of 0.5 per cent and 0.2 per cent.
(8:30 a.m. ET) U.S. core PCE Price Index for July. Consensus is a rise of 0.2 per cent from June and up 2.7 per cent year-over-year.
(9:45 a.m. ET) U.S. Chicago PMI for August.
(10 a.m. ET) U.S. University of Michigan Consumer Sentiment survey for August.
With Reuters and The Canadian Press