Global equities showed an upward trend as markets reacted positively to potential de-escalation in U.S.-China trade tensions. Credit risk concerns in the banking sector have eased, prompting optimism among traders. Futures on Wall Street indicated strong gains following a significant rally that lifted all three major U.S. stock indexes sharply in the previous session.
Market Insights for Canadian Investors
The TSX futures pointed lower today as the market analyses inflation data. In September, Canada’s inflation rate accelerated to an annualized 2.4%, surpassing the anticipated 2.2%. This unexpected increase could impact the Bank of Canada’s interest rate decisions in the upcoming week, as highlighted by economics editor Matt Lundy.
Canadian and U.S. Earnings Reports
Canadian investors are awaiting results from Waste Connections Inc. Meanwhile, Wall Street focuses on earnings reports from major companies, including:
- Netflix Inc.
- GE Aerospace
- Coca-Cola Co.
- Philip Morris International Inc.
- Capital One Financial Corp.
- Lockheed Martin Corp.
- General Motors Co.
- 3M Co.
- Texas Instruments Inc.
- Halliburton Co.
Chris Weston, head of research at Pepperstone, commented on the market’s resilience, stating, “The market has hurdled the wall of worry with ease, with new capital injected into risk.”
Global Market Performance
Overseas, the pan-European STOXX 600 experienced a modest increase of 0.12%. Key European indices also showed gains:
- FTSE 100 (UK): +0.3%
- DAX (Germany): +0.08%
- CAC 40 (France): +0.41%
In Asia, Japan’s Nikkei closed up by 0.27%, and Hong Kong’s Hang Seng rose by 0.67%.
Commodity Trends
Oil prices rose due to decreasing concerns over market oversupply. Brent crude futures increased by 0.54%, reaching US$61.34 per barrel. The West Texas Intermediate (WTI) contract for November also saw a rise of 0.9%, pricing at US$58.06.
However, speculative concerns persist regarding lower prices as Brent remains below US$65, according to Ole Hansen from Saxo Bank. Additionally, spot gold saw a decline of 2.1%, trading at US$4,264.91 per ounce, following a record high of US$4,381.21.
Currency and Bond Markets
The Canadian dollar strengthened against the U.S. dollar, with early trading showing a range from 71.08 to 71.35 cents. Despite this, the Canadian dollar is down approximately 1.37% against the greenback over the past month.
The U.S. dollar index increased by 0.36% to 98.94, while the euro fell by 0.33% to US$1.1605. The British pound depreciated by 0.23% to US$1.3375.
In the bond market, yields on the U.S. 10-year note decreased slightly to 3.970%.
Upcoming Economic News
Key economic events include Japan’s machine tool orders report at 8:30 a.m. ET, and further clarifications on Canada’s CPI data for September, which reflected a rise above estimates.
