Global equity markets are mostly pointing up today, although commodity prices are easing, with London's FTSE 100 rallying sharply after the Bank of England suggested it won't be raising interest rates anytime soon.
U.S. stock futures also gained significant lift just ahead of the opening bell as the European Central Bank head suggested steady, or even lower, interest rates for a considerable period of time for the euro region.
TSX volumes are likely to be light amid the U.S. Fourth of July holiday in the United States. The U.S. non-farm payrolls report comes out Friday. With the significant influence it may have on the timing of when the Federal Reserve may taper its bond-buying stimulus, markets are anxiously awaiting its release.
There's a sense of calm in global markets this morning after tensions rose Wednesday over a possible government collapse in Portugal and as the power struggle reached a boiling point in Egypt, which sent U.S. crude oil prices to above $100 (U.S.) per barrel. The Portuguese foreign minister whose resignation this week sparked concern that the nation's government will fall meets today with the prime minister, in an effort to keep the government in power. Portugal's main stock index rallied 2.2 per cent today and bond yields eased.
Crude oil markets continue to keep a watchful eye on Egypt after the army deposed President Mohamed Mursi. The chief justice of Egypt's constitutional court was sworn in as interim president and new elections are planned. For now, there are no imminent signs that crude oil supplies from the region will be disrupted.
London stocks soared, and the British pound fell more than 1 per cent, after the Bank of England - now with Mark Carney at the helm - kept interest rates unchanged and decided against expanding its bond-buying stimulus program. Hints from Mr. Carney that there will be no near-term rise in interest rates ignited buying in the country's stock market and selling in the sterling.
"In the United Kingdom, there have been further signs that a recovery is in train, although it remains weak by historical standards and a degree of slack is expected to persist for some time," the bank said. "The significant upward movement in market interest rates would, however, weigh on that outlook"
The European Central Bank also left its main interest rate unchanged at a record low, which was widely expected. But the president of the ECB, Mario Draghi, also suggested in a news conference this morning that key interest rates will stay at current levels - or even be lowered - for an "extended period of time." Buying momentum in stocks across the globe accelerated on the comments.
Now, here's a closer look at what's going on this morning and what's to come.
MARKETS:
Equities:
Futures: S&P 500 +0.6 per cent; Dow +0.7 per cent; Nasdaq +0.7 per cent; TSX Toronto +0.1 per cent
Hong Kong's Hang Seng +1.60 per cent
Shanghai composite index +0.59 per cent
Japan's Nikkei -0.26 per cent
London's FTSE 100 +2.19 per cent
Germany's DAX +0.89 per cent
France's CAC 40 +1.16 per cent
Commodities:
WTI crude oil (Nymex Aug) -0.49 per cent at $100.74 (U.S.) a barrel
Gold (Comex Aug) -0.22 per cent at $1,249.10 (U.S.) an ounce
Silver (Comex Sep) -0.79 per cent at $19.55 (U.S.) an ounce.
Copper (Comex Sep) -0.85 per cent at $3.15 (U.S.) a pound
Currencies:
Canadian dollar down 0.0010, or 0.12 per cent, at $0.9508 (U.S.)
U.S. dollar index up 0.58 at 83.81
Bonds:
U.S. 10-year Treasury yield 2.50 per cent, up 0.03
Canada 10-year government bond yield 2.42 per cent, up 0.01
STOCKS TO WATCH:
Earnings today include Richelieu Hardware Ltd.
THIS MORNING'S TOP INVESTING READS ON THE WEB:
Vanguard has launched some long-awaited ETFs.
Anyone who expects U.S. individual investors to push stocks higher by moving away from bonds may end up disappointed.
CNBC is facing an alarming fall in ratings - and Fox is a big reason why.
Five shocks that could short-circuit stocks this summer.
A majority of fixed-income strategists expect yields on the 10-year Treasury note to rise by the end of the year.
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The premarket report is constantly updated to reflect the latest news developments and market moves. For instant headlines on breaking economic and corporate news in the premarket, follow Darcy Keith on Twitter at @eyeonequities. You can also be notified using our dashboard feature when new articles appear from this author. Read more on using this feature here.
Darcy Keith