Before the Bell: Futures waver as markets await U.S. earnings, Canadian inflation data

Equities

Wall Street futures were slightly lower early Tuesday with traders set to weigh in on another set of earnings from major US banks this morning. Major European markets were positive. TSX futures were little changed before reading inflationary pressures in the Canadian economy.

Dow, S&P and Nasdaq futures all moved below the flat line in the early premarket period. All three ended Monday, with the Dow marking its sixth straight day of gains. Canada’s S&P/TSX Composite Index saw a modest 0.17-percent loss on the day.

The key for Canadian investors is Statistics Canada’s June inflation report, due ahead of the opening bell. The numbers come a week after the Bank of Canada raised interest rates again amid ongoing concerns that easing price pressures could stall in the coming months.

“Today CPI [consumer price index] The release comes on the heels of a downside surprise in US inflation data that lowered the odds of a further interest rate hike by the Federal Reserve beyond a widely expected July hike,” Elsa Lignos said. , global head of FX strategy with RBC.

“Year-over-year CPI growth in Canada also looks set to slow significantly – RBC Economics expects to see a 2.9-percent rate in June, down from 3.4 percent in May and just below at the top of the Bank of Canada. 1-percent to 3-percent target.”

He noted that marked a dramatic slowdown from a peak rate of 8 percent a year ago. Much of the slowdown, he said, comes from lower energy prices.

“The BoC will focus on more recent month-on-month developments in a range of core measures designed to provide a better gauge of underlying broader inflationary pressures,” he said. “And the growth of those is stickier to rates that are above the BoC’s target.”

South of the border, US investors will get a reading on US retail sales for June.

On the corporate side, earnings season set in for Wall Street, with lenders including Morgan Stanley and Bank of America reporting results. On Friday, several other major US banks released solid results for the most recent quarter.

“While the investment branches of BoFA and Morgan Stanley may have been hit, investors will be watching how well these banks have benefited from rising rates,” said Swissquote senior analyst Ipek Ozkardeskaya.

Abroad, the pan-European STOXX 600 rose 0.25 percent in morning trading.

Britain’s FTSE 100 gained 0.22 percent. Germany’s DAX added 0.11 percent while France’s CAC 40 rose 0.16 percent.

In Asia, Japan’s Nikkei rose 0.32 percent. Hong Kong’s Hang Seng fell 2.05 percent amid weakness in tech and real estate stocks.

Commodities

Crude oil prices saw modest early gains after declines in the previous session as traders awaited readings on US inventories.

Brent’s day range was US$78.19 to US$78.83 in the early premarket period. The range of West Texas Intermediate is US$73.88 to US$74.51. Both benchmarks lost more than 1 percent on Monday after a weaker-than-expected reading on China’s economic growth fueled concerns about demand.

“The numbers from the world’s second largest economy are almost certainly the bigger factor here especially against the backdrop of slower global growth,” said OANDA senior analyst Craig Erlam.

Later Tuesday, traders will get the first of a two-week reading on US crude oil inventories with the release of new numbers from the American Petroleum Insitute.

More official government figures for last week follow on Wednesday morning.

Analysts expect to see a decline in crude oil stockpiles for the week.

Among other commodities, gold prices rose, supported by the recent weakness of the US dollar.

Spot gold gained 0.2 percent to US$1,959.35 an ounce early Tuesday morning. US gold futures rose 0.3 percent to US$1,963.10.

Money

The Canadian dollar fell slightly in early trading while its U.S. counterpart remained near its lowest level in more than a year as markets weighed the future path for U.S. interest rates.

The loonie’s intraday range was 75.67 US cents to 75.85 US cents in the early premarket period. The Canadian dollar rose about 0.21 percent against the greenback last month.

In global markets, the US dollar index, which measures the greenback against a basket of six currencies, fell to a low of 99.587, not far from the 99.574 seen on Friday, which marked the lowest point for the index since April 2022, according to figures from Reuters.

The euro, meanwhile, hit a fresh 17-month high of US$1.1276 against the US dollar in early European trade, with traders expecting another quarter point rate hike in the European Union. Central Bank later this month.

The British pound advanced 0.1 percent to US$1.3083, not far from last week’s high of US$1.3144, the highest since April 2022, Reuters reported.

In bonds, the yield on the US 10-year note was lower than 3.762 percent in the predawn period.

Economic news

(815 am ET) Canadian housing starts in June.

(830 am ET) Canada consumer price index for June.

(830 am ET) Canada industrial product price index for June.

(830 am ET) US retail sales for June.

(915 am ET) US industrial production for June.

(10 am ET) US NAHB housing market index

(10 am ET) US business inventories

With Reuters and The Canadian Press