Canada's resource-heavy main stock index was set to open lower on Thursday as commodity prices weakened and banks were set to slide on fears that a surprise 100 basis point interest hike could hit mortgage growth, a key growth driver of the sector.
The S&P/TSX lost 63.45 points to close Wednesday at 18,615.19.
September futures withered 0.7% Thursday.
The Canadian dollar plummeted 0.75 cents to 76.16. cents U.S.
On the economic stage, Statistics Canada said manufacturing sales fell 2.0% in May, mainly on lower sales of motor vehicles and primary metals.
Excluding the transportation equipment industry, total manufacturing sales rose 0.2% in May.
ON BAYSTREET
The TSX Venture Exchange gained 2.9 points Wednesday to 595.60.
ON WALLSTREET
Stock futures fell Thursday as traders assess the possibility of even tighter U.S. monetary policy on the back of a hot inflation report. Traders also pored over key quarterly results.
Futures for the Dow Jones Industrials plunged 477 points, or 1.6%, early Thursday to 30,281.
Futures for the S&P 500 slumped 57.25 points, or 1.5%, to 3,747.75.
Futures for the NASDAQ Composite ditched 131.5 points, or 1.1%, to 11,630.75.
Futures added to their losses after JPMorgan Chase reported quarterly earnings that missed analyst expectations. The stock fell more than 4% in pre-market trading. Morgan Stanley is also set to report Thursday.
The consumer price index rose 9.1% on the year in June, higher than a Dow Jones estimate for an 8.8% year-over-year increase. Core CPI, which excludes volatile prices of food and energy, was 5.9%, also ahead of a 5.7% estimate.
In addition, the Beige Book, released Wednesday by the Fed showed worries of an upcoming recession amid high inflation.
The CPI report also impacted treasuries, sending the 2-year Treasury yield up nine basis points to about 3.138% while the yield on the 10-year Treasury fell about 4 basis points to 2.919. An inversion of the two is a popular signal of a recession.
The report also opened the door for a big Federal Reserve rate increase later this month, with the fed funds futures market now pricing in a hike of as much as 1% — or 100 basis points.
Weekly jobless claims and the June producer price index report, which measures prices paid to producers of goods and services, will also be released Thursday. Both reports will give further insight into the economy.
In Japan, the Nikkei 225 gained 0.6% Thursday. In Hong Kong, the Hang Seng hesitated 0.2%
Oil prices sank $2.33 to $93.97 U.S. a barrel.
Gold prices lost $24.70 to $1,710.80 U.S. an ounce.
Related Stories
