Equities
World stocks drifted downward as investors turned cautious ahead of a slew of economic data that may determine how deeply the U.S. Federal Reserve will cut interest rates.
Wall Street’s main indexes followed sentiment lower at the open. The Dow Jones Industrial Average fell 0.18 per cent to 41,489.67, the S&P 500 dropped 0.43 per cent to 5,623.89, and the Nasdaq Composite declined 0.72 per cent to 17,585.45.
The Toronto Stock Exchange’s S&P/TSX composite index closed 0.66 per cent at 23,192.14, amid broad-based losses led by mining and energy shares.
Investors were looking to tomorrow’s policy announcement by the Bank of Canada, which is widely expected to cut interest rates for the third consecutive time.
“The absence of the American markets [yesterday] revived the worries that we might see a rebound in U.S. jobs figures this week – a scenario which would derail the Federal Reserve doves, reshuffle the Fed cut expectations and give way to a potentially sizeable price action across different asset classes,” Ipek Ozkardeskaya, senior analyst at Swissquote Bank, wrote in a note.
Overseas, the pan-European STOXX 600 was down 0.38 per cent in morning trading. Britain’s FTSE 100 dropped 0.56 per cent, Germany’s DAX fell 0.32 per cent and France’s CAC 40 gave back 0.23 per cent.
In Asia, Japan’s Nikkei closed 0.04 per cent lower, while Hong Kong’s Hang Seng slipped 0.23 per cent.
Commodities
Brent oil prices declined as sluggish economic growth in China, the world’s biggest crude importer, increased demand concerns that overshadowed the impact of halted production and exports from Libya. Futures fell 2.1 per cent to US$75.86 a barrel.
West Texas Intermediate (WTI) crude futures, which did not settle on yesterday because of the U.S. holiday, were down 1.5 per cent at US$72.48.
“The weaker than expected Chinese manufacturing PMI over the weekend likely exacerbated concerns about the Chinese economy’s performance,” said Charalampos Pissouros, senior investment analyst at brokerage XM.
In other commodities, spot gold fell 1 per cent to US$2,475.39 an ounce, while U.S. gold futures gained 0.1 per cent to US$2,530.70.
Currencies and bonds
The Canadian dollar weakened against its U.S. counterpart.
The day range on the loonie was 73.79 US cents to 74.12 US cents in early trading. The Canadian dollar was up about 1.86 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 101.75.
The euro slid 0.18 per cent to US$1.1053. The British pound fell 0.08 per cent to US$1.3138.
In bonds, the yield on the U.S. 10-year note was down at 3.883 per cent.
Other business news
Two years after China lifted a ban on Canadian canola imports, Beijing said it would launch an anti-dumping investigation into the crop, following Ottawa’s imposition of tariffs on Chinese electric vehicles
Economic news
(9:30 a.m. ET) Canadian S&P Global Manufacturing PMI for August, which rose to a five-month high.
(9:45 a.m. ET) U.S. S&P Global Manufacturing PMI for August.
(10 a.m. ET) U.S. construction spending for July, which fell more than expected. It dropped 0.3 per cent compared with Street expectations of a 0.1-per-cent increase.
(10 a.m. ET) U.S. ISM Manufacturing PMI for August.
With Reuters and The Canadian Press