Equities
Global markets were higher as as investors weighed crucial U.S. economic data, while Asian stocks got a mighty boost from China’s latest stimulus moves.
The latest PCE price index figures, the U.S. Federal Reserve’s preferred inflation indicator, showed inflation slowed last month. The index rose 2.2 per cent in August on an annual basis, compared with estimates of 2.3 per cent.
Wall Street’s main stock indexes opened higher, with the S&P 500 near record highs, as the data raised expectations that the Fed could now focus on shoring up the labor market and continue easing interest rates.
The Dow Jones Industrial Average rose 0.13 per cent to 42,227.95, and the S&P 500 gained 0.17 per cent to 5,755.36, and the Nasdaq Composite advanced 0.21 per cent to 18,228.778 at the bell.
the Toronto Stock Exchange’s S&P/TSX composite index opened 0.1 per cent higher at 24,056.96 on rate-cut optimism.
“A stronger-than-expected PCE read ... could bring the idea that the Fed and the dovish Fed expectations may have gone ahead of themselves and call for some correction,” Ipek Ozkardeskaya, senior analyst at Swissquote Bank, wrote in a note.
“Yesterday’s robust GDP read brought the probability of 50bp cut at the November meeting slightly below 50 per cent, but the chances are still very close to a coin toss.”
Overseas, the pan-European STOXX 600 was up 0.44 per cent in morning trading. Britain’s FTSE 100 gained 0.34 per cent, Germany’s DAX rose 1.14 per cent and France’s CAC 40 advanced 0.48 per cent.
In Asia, Japan’s Nikkei closed 2.32 per cent higher, while Hong Kong’s Hang Seng surged 3.55 per cent.
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Commodities
Oil prices held steady but stayed on track for a weekly fall as investors weighed expectations for increased output from Libya and the broader OPEC+ group against fresh stimulus from top importer China.
Brent crude futures were up 0.1 per cent at US$71.68 a barrel, while U.S. West Texas Intermediate (WTI) crude futures rose 0.2 per cent to US$67.78.
“The recent decision by OPEC+ to ramp up production has only added to the gloom,” said Priyanka Sachdeva, senior market analyst at Phillip Nova, adding that the oil market has been struggling with weakening demand over the past few months.
In other commodities, spot gold was down 0.2 per cent to US$2,666.50 an ounce, holding below its record of US$2,685.42 in the previous session. U.S. gold futures fell 0.2 per cent to US$2,688.90.
Currencies and bonds
The Canadian dollar weakened against its U.S. counterpart.
The day range on the loonie was 74.09 US cents to 74.27 US cents in early trading. The Canadian dollar was up about 0.07 per cent against the greenback over the past month.
The U.S. dollar index, which weighs the greenback against a group of currencies, dropped 0.31 per cent to 100.20.
The euro gained 0.1 per cent to US$1.1189. The British pound was flat at US$1.3415.
In bonds, the yield on the U.S. 10-year note was last down at 3.772 per cent.
Economic news
China industrial profits
Japan CPI
Euro zone economic and consumer confidence
Germany employment
(8:30 a.m. ET) Canada’s monthly real GDP for July, which expanded at a faster-than-expected 0.2 per cent, driven by growth in retail trade and public sectors. The Street forecast a rise of 0.1 per cent from June.
(8:30 a.m. ET) U.S. personal spending and income for August.
(8:30 a.m. ET) U.S. core PCE price index for August.
(8:30 a.m. ET) U.S. goods trade deficit for August.
(10 a.m. ET) U.S. University of Michigan Consumer Sentiment Index for September.
Also: Ottawa’s budget balance for July.
With Reuters and The Canadian Press