Equities
Global markets drifted lower Tuesday while Wall Street futures were muted as investors awaited minutes of the U.S. Federal Reserve’s latest policy meeting Wednesday to gauge the timing and extent of possible interest rate cuts this year. TSX futures were modestly lower, pressured by weak commodity prices.
In Canada, investors are looking over April’s inflation numbers, which could ultimately persuade the Bank of Canada to hold or cut interest rates at the next decision in early June.
The consumer price index slowed to an annual rate of 2.7 per cent, matching analysists’ expectations.
They will also be eyeing bank earnings, which kick off on Thursday with second-quarter results from Toronto-Dominion Bank. The rest of the Big Six banks will release results next week.
The Globe’s Stefanie Marotta is reporting that analysts expect bank earnings will continue to be crimped by high borrowing costs and slower economic growth until central banks start cutting rates.
On Wall Street, markets are getting results from Lowe’s Cos. Inc. and Macy’s Inc.
“Market sentiment remains relatively robust, with implied volatility low, supported by greater confidence in U.S. rate cuts this year,” Kyle Rodda, senior markets analyst at Capital.com, wrote in a note.
Overseas, the pan-European STOXX 600 slid 0.5 per cent in morning trading. Britain’s FTSE 100 fell 0.42 per cent, Germany’s DAX gave back 0.53 per cent and France’s CAC 40 retreated 1.03 per cent.
In Asia, Japan’s Nikkei closed down 0.31 per cent at 38,946.93, while Hong Kong’s Hang Seng dropped 2.12 per cent to 19,220.62.
Commodities
Oil prices dropped by more than US$1, extending losses on investor expectations that lingering U.S. inflation could keep interest rates higher for longer, depressing consumer and industrial demand.
Brent crude futures fell 1.3 per cent to US$82.63 a barrel and U.S. West Texas Intermediate crude (WTI) also eased 1.3 per cent to US$78.73.
In other commodities, gold eased 0.3 per cent to about US$2,417 an ounce, after pushing to the cusp of US$2,450 for the first time overnight.
Record highs for metals such as gold and copper “is being pointed to as a signal economic activity is improving globally, and that may be a factor keeping inflation sticky,” Mr. Rodda said.
Currencies and bonds
The Canadian dollar was trading down slightly while the U.S. dollar edged lower.
The day range on the loonie was 73.28 US cents to 73.42 US cents in the early premarket period. The Canadian dollar was up about 0.24 per cent against the greenback over the past month.
The U.S. dollar index, which weighs the greenback against a group of currencies, dropped 0.08 per cent to 104.52 after rebounding from a five-week trough of 104.07 reached on Thursday.
Cryptocurrencies ether and bitcoin climbed to fresh six-week peaks on speculation that the U.S. Securities and Exchange Commission may approve a spot ether exchange-traded fund.
Bitcoin climbed as high as US$71,957 and ether jumped to US$3,780.60, both hitting levels not seen since April 9.
The euro rose 0.12 per cent to US$1.0869. Britain’s pound added 0.04 per cent to US$1.27115.
In bonds, the yield on the U.S. 10-year note was little changed at 4.4355 per cent, after ticking up 1.7 basis points yesterday.
Other corporate news
Lowe’s Cos. Inc. has reported a lower-than-expected drop in quarterly sales, helped by more small-scale repairs undertaken by inflation-hit Americans. Same-store sales at the company fell 4.1 per cent in the first quarter, compared with analysts’ average estimate of a 5.65-per-cent decline, according to LSEG data.
Macy’s Inc. has posted a bigger-than-expected drop in first-quarter sales, hobbled by stiff competition from off-price retailers. But the upscale department store operator raised its annual profit forecast, signaling that efforts to reduce costs by closing some stores and trimming jobs were starting to pay off..
Economic news
(8:30 a.m. ET) Canadian consumer price index for April. The Street expects an increase of 0.5 per cent from March and up 2.7 per cent year-over-year.
North American markets open at 9:30 a.m. ET.
With Reuters and The Canadian Press