The S&P/TSX Composite index looked set to open higher on Tuesday as commodity prices surged on increased hopes of a policy easing in top metals user China and as German investor sentiment recorded its biggest jump ever.
Investors will also keep a close eye on the Bank of Canada's interest rate announcement. The central bank is expected to hold rates steady, so investors will watch for any tweaks to its assessment of the outlook for the domestic and global economies.
Meantime, Canada's dollar climbed to its strongest level against the U.S. currency in nearly two weeks on Tuesday as investors embraced riskier assets following upbeat economic news from China and Germany. The Canadian dollar rose nearly 0.4 cents to 98.63 U.S. cents
Among stocks to watch this morning, Toronto-Dominion Bank, who along with BB&T Corp, is a suitor to acquire BankUnited Inc, according to a report by Bloomberg news.
U.S. stock markets, re-opening after the Martin Luther King Day weekend, were also poised to rise. Dow futures gained 118 points, or 1%, at 12,508. S&P 500 futures rose 9.9 points, or 0.8% to 1,300.50. Nasdaq futures soared 13.5 points, or 0.6% to 2,398.25
Overseas, Germany and China gave investors reasons to put their faith in growth, with stocks rallying across the world following positive economic readings.
Britain's FTSE 100 gained 0.6%, France's CAC 40 rose 1.3%, and Germany's DAX gained 1.7%.
January's survey of German economic sentiment by the ZEW think tank posted its biggest ever monthly rise, easing fears of a recession in Europe’s largest economy. It indicated that economic activity should stabilize over the next six months.
Also aiding sentiment was a Spanish debt auction, where borrowing costs plummeted and demand outstripped supply by more than three times. Spain's borrowing rates fell to 2.049% from 4.05% for 12-month debt and to 2.399% from 4.226% for 18-month debt.
The euro jumped to a session high of $1.28 U.S., about 1% higher on the day.
Japan's Nikkei rose 1.1%, while Hong Kong's Hang Seng leapt 3.2%. The data followed earlier numbers from China showing the world’s second-largest economy grew by 8.9% in the fourth quarter of 2011, beating a forecast of 8.7% by economists polled by Reuters, although growth was at the slowest pace in 2-1/2 years. That may make economic stimulus more likely.
Copper rose by about 2% to hit its highest level in almost three months, trading around $8,262 U.S. a tonne.
Oil prices jumped $1.03 a barrel to $100.71 U.S.
Gold climbed to its highest level in five weeks. U.S. gold futures for February delivery were up $32.20 an ounce at $1,663.00 U.S.
