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Global markets were mixed as investors awaited a widely forecast interest rate hike from the European Central Bank, and a wave of attacks in the Middle East left them nervous ahead of U.S. inflation data that will influence monetary policy there. |
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Wall Street futures were muted with the Nasdaq pointing lower after major North American markets closed down yesterday. |
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TSX futures edged into negative territory. |
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In Canada, investors are getting results from Empire Co. Ltd., Descartes Systems Group Inc., Transat A.T. Inc. and Groupe Dynamite Inc. |
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On Wall Street, markets are watching earnings from Oracle Corp., Adobe Inc. and Macy’s Inc. |
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“European Central Bank (ECB) officials are expected to raise rates by another 25 [basis points] today, as the renewed surge in energy prices pushed headline inflation back above 3 per cent in the euro area,” Ipek Ozkardeskaya, senior analyst at Swissquote, wrote in a note. |
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“The bad news is that higher borrowing costs weigh on valuations. But the good news is that this week’s potential 25bp hike is almost entirely priced in.” |
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Overseas, the pan-European STOXX 600 was down 0.14 per cent in morning trading. Britain’s FTSE 100 fell 0.36 per cent, Germany’s DAX declined 0.11 per cent and France’s CAC 40 advanced 0.18 per cent. |
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In Asia, Japan’s Nikkei closed 0.2 per cent higher, while Hong Kong’s Hang Seng dropped 1.27 per cent. |
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Oil prices continued to climb as Brent crude remained above US$100 a barrel and traders braced for deeper supply disruptions after Iran and the United States launched their largest attacks on shipping since their six-month-old conflict began. |
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Brent crude futures rose 0.9 per cent to US$102.10 a barrel. West Texas Intermediate (WTI) crude traded at US$97.47, up 1.48 per cent. |
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Brent prices have surged roughly 30 per cent from lows touched in early August as a permanent agreement between the U.S. and Iran to cease attacks has not materialized and fighting resumed later in the month. |
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“Renewed hostilities between the U.S. and Iran, after nearly a month of relative calm, have once again lifted the geopolitical risk premium in crude oil,” said Sugandha Sachdeva, the founder of SS WealthStreet, a New Delhi-based research firm. |
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In other commodities, spot gold ticked up 0.1 per cent at US$4,405.90 an ounce. U.S. gold futures for December delivery fell 0.3 per cent to US$4,448.80. |
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The Canadian dollar weakened against its U.S. counterpart. |
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The day range on the loonie was 72.37 US cents to 72.48 US cents in early trading. The Canadian dollar was up about 0.87 per cent against the greenback over the past month. It traded at $1.3811 per US$1. |
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The U.S. dollar index, which weighs the greenback against a group of currencies, slid 0.04 per cent to 98.77. |
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The euro edged up 0.01 per cent to US$1.1636. The British pound gained 0.02 per cent to US$1.3551. |
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In bonds, the yield on the U.S. 10-year note was last up at 4.862 per cent. |
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ECB’s monetary policy meeting |
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8:30 a.m. ET: U.S. initial jobless claims for week of Sept. 5. The Street expects 208,000, up 2,000 from the previous week. |
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8:30 a.m. ET: U.S. PPI final demand for August. Consensus is a month-over-month rise of 0.4 per cent. |
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10 a.m. ET: U.S. existing home sales for August. |
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10 a.m. ET: U.S. wholesale trade for July. |
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With Reuters and The Canadian Press |
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