Morning Money | Wednesday, October 14
THE BIG PICTURE
Today’s U.S. inflation report is the main market event—and it matters directly to Canadians. Economists expect September inflation to accelerate to about 3.6% year over year, largely because of higher energy costs. A hotter number could push North American bond yields higher, strengthen the U.S. dollar against the loonie and add pressure to Canadian mortgage rates. A cooler reading would offer some relief.
Canada is already balancing a weak job market against expensive oil. That makes today’s inflation signal especially important for the Bank of Canada, borrowers and the Canadian dollar.
MARKETS THIS MORNING
• TSX futures edged up about 0.2% as global bond yields eased, although weaker precious metals limited the gain.
• U.S. futures were mixed: Dow futures rose about 0.3%, S&P 500 futures gained 0.2%, and Nasdaq futures slipped 0.2%.
• Europe’s STOXX 600 climbed roughly 0.5% as technology shares stabilized after the recent semiconductor selloff.
• Brent crude held above US$100 a barrel after two vessels were struck near the Strait of Hormuz, keeping energy-supply risks elevated.
• Chip shares remained under pressure: Intel, Micron and Nvidia were all lower before the bell amid concerns about growing Chinese competition.
EARNINGS CHECK
Bank of America fell more than 4% premarket after quarterly profit declined and it set aside US$1.2 billion for regulatory fines. Morgan Stanley was little changed despite higher profit, while BlackRock gained nearly 5% after stronger earnings driven by higher management fees.
WHAT TO WATCH
The U.S. CPI release arrives at 8:30 a.m. ET. Beyond the headline number, watch core inflation, bond yields, the Canadian dollar and rate-sensitive sectors. Bank of Canada Governor Tiff Macklem is also participating in international finance meetings this week, keeping Canada’s growth and rate outlook in focus.
