North American markets look set for a firmer start to the session as investors look beyond mixed overnight trading and focus on improving risk sentiment, with NASDAQ futures leading gains ahead of the open. Technology shares are once again providing leadership as markets continue to navigate a backdrop of moderating inflation, resilient economic data, and persistent geopolitical uncertainty.
Energy markets remain unsettled following another weekend of military strikes in the Middle East. Oil prices have traded choppily after Iran signalled a willingness to begin discussions with the United States, raising hopes that diplomatic channels may reopen even as tensions across the region remain elevated. The evolving geopolitical backdrop continues to support elevated energy prices while contributing to cautious positioning across broader financial markets.
In Asia, trading was mixed, with the Hang Seng advancing 2.4% while Japan’s Nikkei fell 4.0% and South Korea’s KOSPI declined 4.4%. Chinese markets found support after the People’s Bank of China maintained its benchmark lending rate at 3.00%, reinforcing expectations that policymakers remain committed to supporting economic stability. The decision also helped lift industrial commodities, with copper rising 0.8% to trade near $6.30 per pound. European markets have opened modestly higher, with the DAX gaining 0.2% and the FTSE 100 advancing 0.4%, while U.S. futures point to a stronger start as NASDAQ futures climb 0.9% and Dow futures add 0.2%.
Canadian inflation data provided another encouraging signal for investors. Consumer prices rose 2.8%, below both the consensus estimate of 2.9% and the previous reading of 3.2%, suggesting inflationary pressures continue to ease. While a single report is unlikely to alter the policy outlook on its own, the softer reading should be welcomed by markets as expectations surrounding future interest rate decisions continue to evolve.
Commodity markets are mixed this morning. West Texas Intermediate Crude is down 0.4% but continues to trade above US$82.00 per barrel, while Brent Crude is up 0.3% and remains above US$88.00 per barrel. Gasoline is modestly higher near US$3.40 per gallon. Gold is down 0.1% while continuing to trade near the US$4,000 per ounce level, Silver has added 1.1%, and Copper continues to outperform on renewed optimism surrounding China’s economic outlook.
Fixed income markets are relatively quiet, with the U.S. 10-year Treasury yield holding near 4.55% and the 30-year Treasury yield steady around 5.10%. The U.S. Dollar is modestly stronger on the day, while both the Euro and Canadian Dollar are lower by 0.2%.
Looking ahead, the focus will increasingly shift toward second-quarter earnings as reporting season broadens across multiple sectors. This week’s headline releases include 3M on Tuesday; Alphabet, Tesla, and Rogers Communications on Wednesday; Intel, Lockheed Martin, and Teck Resources on Thursday; and Canadian National Railway on Friday.
On the economic front, it is a relatively quiet week, with Canadian retail sales due Thursday followed by Flash PMI reports from several major economies, providing investors with the next important read on global business activity and economic momentum.