Equities
Global markets were mostly lower in cautious trading, as investors considered whether the U.S. Federal Reserve could offer further hints of imminent interest rate cuts later this week at the Jackson Hole symposium.
Wall Street’s main indexes opened marginally lower, as investors refrained from risk taking. The Dow Jones Industrial Average fell 0.05 per cent to 40,874.52, the S&P 500 slid 0.10 per cent to 5,602.88, and the Nasdaq Composite dropped 0.15 per cent to 17,849.087 at the bell.
The Toronto Stock Exchange’s S&P/TSX composite index opened 0.11 per cent lower at 23,090.39 after data that showed Canada’s inflation rate slowed in July to 2.5 per cent, matching analysts’ expectations.
Investors are watching earnings from Lowe’s Cos. Inc. The retailer has lowered its annual profit and sales forecasts, joining bigger rival Home Depot in issuing bleak projections as economic concerns keep consumers from splurging on pricy home improvements.
With the data calendar relatively light across major economies this week, all eyes are on Wednesday’s release of the Fed’s July meeting minutes and chairman Jerome Powell’s speech on Friday for clues on the outlook for U.S. rates.
“Should [Fed policymakers] acknowledge the U.S. economy’s disinflation path, it will confirm a September rate cut,” said Thierry Wizman, global FX and rates strategist at Macquarie.
“Markets will likely turn on the extent to which Powell opens the door for the possibility of a 50-basis-point cut at one of the next three FOMC meetings.”
Overseas, the pan-European STOXX 600 was down 0.29 per cent in morning trading. Britain’s FTSE 100 gave back 0.91 per cent, Germany’s DAX declined 0.23 per cent and France’s CAC 40 retreated 0.11 per cent.
In Asia, Japan’s Nikkei closed 1.8 per cent higher, while Hong Kong’s Hang Seng dipped 0.3 per cent.
Commodities
Oil prices steadied after falling for two straight sessions as worries eased about supply disruptions in the Middle East while China’s economic weakness weighed on the demand outlook.
Brent crude futures were down 0.03 per cent at US$77.64 per barrel, and West Texas Intermediate (WTI) crude futures rose modestly to US$73.61.
“On the one hand the thinner liquidity in the oil market at present, on the other hand some of the comments from State Secretary [Antony] Blinken on a possible Gaza ceasefire deal, triggering an unwinding of some oil price spike hedge positions,” UBS analyst Giovanni Staunovo said.
In other commodities, spot gold was up 1 per cent at US$2,528.38 an ounce, surpassing a previous record hit on Friday. U.S. gold futures gained 0.8 per cent to US$2,561.10.
Currencies and bonds
The Canadian dollar was flat against its U.S. counterpart.
The day range on the loonie was 73.29 US cents to 73.51 US cents in early trading. The Canadian dollar was up about 1.26 per cent against the greenback over the past month.
The U.S. dollar index, which weighs the greenback against a group of currencies, slid 0.21 per cent to 101.67.
The euro declined 0.05 per cent to US$1.1082. The British pound gained 0.13 per cent to US$1.3008.
In bonds, the yield on the U.S. 10-year note was last down at 3.845 per cent.
Economic news
Euro zone CPI
(8:30 a.m. ET) Canada’s CPI for July, which rose to an annual rate of 2.5 per cent, matching the Street’s projections.
(8:30 a.m. ET) Canada’s new housing price index for July. Estimate is a decline of 0.2 per cent month-over-month and down 0.4 per cent year-over-year.
With Reuters and The Canadian Press