Equities
Global markets were mixed ahead of inflation data that could pave the way for rate cuts in the United States and Europe, while Wall Street braced for earnings from AI darling Nvidia on Wednesday.
U.S. futures pointed higher after Friday’s rally on Federal Reserve chair Jerome Powell’s dovish rate-policy shift during comments at the Jackson Hole symposium.
TSX futures were in positive territory with Canadian investors looking ahead to the rest of the big six banks releasing their third-quarter results later in the week, after Toronto-Dominion Bank reported last week. Bank of Montreal and Bank of Nova Scotia report tomorrow.
Markets are getting earnings from BHP Group Ltd. today.
“We continue to expect the [FED] to deliver an initial string of three consecutive 25 [basis point] cuts at the September, November, and December meetings,” said analysts at Goldman Sachs.
“Our forecast rests on our assumption that the August employment report will be stronger than the July report, but we continue to think that if instead the August report is weaker than we expect, then a 50bp cut would be likely.”
Overseas, the pan-European STOXX 600 was flat in morning trading. Germany’s DAX fell 0.24 per cent and France’s CAC 40 advanced 0.13 per cent. British markets were closed for a holiday.
In Asia, Japan’s Nikkei closed 0.66 per cent lower, while Hong Kong’s Hang Seng rose 1.06 per cent.
Commodities
Oil prices extended gains on fears a major spillover in fighting from the Gaza conflict into the Middle East could disrupt regional oil supplies, while approaching U.S. interest rate cuts lifted the global economic and fuel demand outlook.
Brent crude futures climbed 1 per cent to US$79.81 a barrel, while West Texas Intermediate (WTI) crude futures were at US$75.63 a barrel, up 1.07 per cent.
“Geopolitical risk factors will likely influence the oil market significantly,” said Kelvin Wong, a senior market analyst at OANDA in Singapore.
“Increased odds of a tit-for-tat retaliation attack by Hezbollah and Iran in response to Israel’s pre-emptive strike on Hezbollah sites in Southern Lebanon may keep WTI crude supported.”
In other commodities, gold prices firmed. Spot gold rose 0.4 per cent to US$2,520.39 an ounce after gaining more than 1 per cent in the previous session. U.S. gold futures also gained 0.4 per cent to US$2,556.00.
Currencies and bonds
The Canadian dollar strengthened against its U.S. counterpart.
The day range on the loonie was 73.92 US cents to 74.08 US cents in the early premarket period. The Canadian dollar was up about 2.59 per cent against the greenback over the past month.
The U.S. dollar index, which weighs the greenback against a group of currencies, inched higher to 100.74.
The euro slid 0.11 per cent to US$1.1182. The British pound fell 0.15 per cent to US$1.3197.
In bonds, the yield on the U.S. 10-year note was last down at 3.784 per cent ahead of the North American opening bell.
Economic news
Germany business sentiment, which fell for a third consecutive month in August, a survey showed, pushing back recovery hopes for Europe’s largest economy.
(8:30 a.m. ET) U.S. durable and core orders for July. The Street is projecting month-over-month increases of 4.2 per cent and 0.1 per cent, respectively.
(10:30 a.m. ET) U.S. Dallas Fed Manufacturing Activity for August.
With Reuters and The Canadian Press