Global markets were mixed as benign inflation data dented expectations of an imminent U.S. rate hike, although faltering talks to end the war in the Middle East are likely to keep risk sentiment in check.

Wall Street futures were muted with the Dow pointing lower after the S&P 500 notched a record-high close yesterday.

TSX futures were in the red after Canada’s main stock market also closed at a fresh record yesterday.

On Wall Street, markets are watching earnings from RLX Technology Inc.

Charu Chanana, chief investment strategist at Saxo, said risk appetite can hold for now because the immediate Fed hike risk has been repriced lower, noting softer oil is also helping.

“But this is still a headline-driven rally rather than a clean risk-on regime,” said Chanana. “Without clarity on the Middle East/Hormuz, another oil spike could quickly revive inflation and Fed concerns.”

Overseas, the pan-European STOXX 600 was up 0.08 per cent in morning trading. Britain’s FTSE 100 dropped 0.06 per cent, Germany’s DAX advanced 0.7 per cent and France’s CAC 40 gained 0.07 per cent.

In Asia, Japan’s Nikkei closed 0.59 per cent higher, while Hong Kong’s Hang Seng fell 1.1 per cent.

Oil prices rose after the United States threatened an indefinite naval blockade of Iran, raising concerns about disruptions to crude supplies from the Middle East.

Brent futures were up 0.26 per cent to US$87.30 a barrel. West Texas Intermediate (WTI) crude futures gained 0.85 per cent to US$81.94 a barrel.

In other commodities, spot gold eased 0.1 per cent to US$4,344.24 an ounce. U.S. gold futures for December delivery slid 0.4 per cent to US$4,400.40.

The Canadian dollar strengthened against its U.S. counterpart.

The day range on the loonie was 71.73 US cents to 72.02 US cents in early trading. The Canadian dollar was up about 0.93 per cent against the greenback over the past month.

The U.S. dollar index, which weighs the greenback against a group of currencies, slid 0.24 per cent to 99.73. The dollar was pegged at $1.3890.

The euro rose 0.23 per cent to US$1.1555. The British pound gained 0.32 per cent to US$1.3528.

In bonds, the yield on the U.S. 10-year note was last up at 4.658 per cent.

Euro zone real GDP and trade balance

8:30 a.m. ET: Canadian manufacturing shipments for June. The Street is projecting a month-over-month decline of 0.1 per cent.

8:30 a.m. ET: Canada’s wholesale sales for June (excluding petroleum). Consensus is a gain of 2.7 per cent month-over-month.

8:30 a.m. ET: U.S. retail sales for July. Consensus is a month-over-month rise of 0.2 per cent.

10 a.m. ET: U.S. University of Michigan consumer sentiment for August (preliminary reading).

10 a.m. ET: U.S. business inventories for June.

With Reuters and The Canadian Press