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Colin Cieszynski

The Before the Bell report is compiled by editors of The Globe and Mail and is updated throughout the morning to reflect latest developments. Colin Cieszynski, Chartered Financial Analyst and Chartered Market Technician, is chief market strategist with CMC Markets.

World equity markets' march higher stalled overnight. U.S. index futures, the FTSE and the Dax are all trading flat this morning while the Nikkei fell by 1.1 per cent. Political and monetary developments along with economic news have impacted sentiment across a number of markets overnight while traders await today's testimony to Congress from Federal Reserve Chair Janet Yellen.

Just as it seemed political uncertainty in the U.S. was easing following successful summits involving no fireworks between U.S. President Donald Trump and the Prime Ministers of Japan and then Canada, and the confirmation of U.S. Treasury Secretary Steven Mnuchin, things flared up again as National Security Adviser Mike Flynn resigned overnight over contacts between him and Russia before the inauguration. The U.S. dollar has dropped back a bit on this news while the Canadian dollar continues to rally with the risk of a trade war sideswiping Canada's economy continuing to fade for now.

The British pound, on the other hand, has been sinking this morning after Brexit Minister David Davis indicated the U.K. government will likely not be ready to trigger Article 50 at the European Union summit on March 9, but still expects to do so by the end of March. He expects smooth passage of the bill through the House of Lords, where debate starts next week.

There has been a lot of economic news out today with the main theme being one of rising inflation, particularly raw materials and wholesale prices exceeding expectations. Rising inflation could stymie the remaining dovish central banks and could force others to take a more hawkish turn so these reports could have a significant impact on currency trading. Meanwhile, Greece reported a surprise GDP decline and in Italy, former Prime Minister Matteo Renzi's party is holding a leadership contest ahead of potential elections this year so political and economic turbulence remains a growing issue on the continent.

During the U.S. trading day, all eyes are likely to be on Ms. Yellen's first testimony to the Congress since the change in government control. Having been dovish to date, and entering the last year of her term with a renewal unlikely, it remains to be seen if she is actually going to take the hawkish turn the Street has priced into the U.S. dollar or not. The Street has been expecting four interest rate hikes this year and to reach that at a gradual pace, the Fed would need to raise interest rates in March. Any signs the Fed could pass in March would be seen as dovish by traders and could knock the U.S. dollar down. Dallas Fed President Robert Kaplan, a member of this year's hawkish voting contingent, speaks later in the day which could also spark activity in the markets.

Now, here is a closer look at key market data, and corporate and economic news.


Futures (as of about 7:30 a.m. ET)

Dow -0.02 per cent; S&P 500 -0.02 per cent; Nasdaq: -0.02 per cent; TSX 60 -0.03 per cent

Japan's Nikkei -1.13 per cent
Shanghai composite index +0.05 per cent
Hong Kong's Hang Seng -0.03 per cent 
Germany's DAX -0.00 per cent
London's FTSE +0.11 per cent
France's CAC 40 +0.08 per cent

WTI crude oil (Nymex March) -0.91 per cent at $53.41 (U.S.) a barrel
Gold (Comex April) +0.51 per cent at $1,232.00  (U.S.) an ounce
Copper (Comex March) +0.66 per cent at $2.80 (U.S.) a pound

Canadian dollar +0.27 at 76.72 cents (U.S.)
U.S. dollar index -0.09 at 100.71

Canada 10-year bond yield -0.14 at 1.74 per cent


Japan industrial production
China consumer price index and producer price index 
Euro Area real GDP and industrial production
Germany real GDP, CPI and ZEW Survey
U.K. CPI and PPI


(8:30 a.m. ET) U.S. PPI Final Demand for January. The consensus projection is an increase of 0.3 per cent from December and 1.5 per cent year over year. Excluding food and energy, the projections are increases of 0.1 per cent and 1.1 per cent.

The U.S. Producer Price Index rose 0.6 per cent in January, more than the 0.3-per-cent increase expected by analysts, after increasing 0.2 per cent a month earlier.

(10 a.m. ET) U.S. Fed's semi-annual monetary policy report to the Senate Banking Committee


Also see: Tuesday's small-cap stocks to watch


Shares of General Motors rose 3.4 percent to $36.74 premarket after Reuters reported Peugeot-owner PSA Group in talks to combine with GM's European Opel business. Shares of Fiat and Ford also rose.


Gilead was up 0.95 percent after the drugmaker presented positive findings for an experimental HIV drug.


TMX Group Ltd., which owns and operates the Toronto Stock Exchange, reported better-than-expected quarterly results late Monday as the exchange operator reaped benefits from cost cuts. TMX's adjusted diluted earnings per share was $1.18 in the fourth quarter ended Dec. 31, above the analysts' average estimate of $1.12, according to Thomson Reuters I/B/E/S.


Restaurant Brands International Inc., owner of the Burger King and Tim Hortons fast-food chains, has approached Popeyes Louisiana Kitchen Inc. about a possible acquisition, people familiar with the matter told Reuters on Monday. Popeyes shares fell 3.28 per cent in premarket trading after rising on the news Monday.


Health insurers Aetna Inc. and Humana Inc. said on Tuesday that they would end their $34 billion merger agreement after a U.S. federal court ruled against the deal, saying it would stifle competition in the Medicare Advantage program.  Aetna will pay Humana a $1 billion breakup fee and has terminated its plan to sell some Medicare Advantage assets to Molina Healthcare Inc, the companies said.


Magellan Aerospace  says it plans to construct a $28-million, sprawling new manufacturing and assembly facility in India. The Mississauga, Ont.- based company says the 140,000 sq. ft. building will be constructed in a special aerospace economic zone near the Bangalore International Airport. Magellan says it expects to break ground for the new facility in June.


T-Mobile US Inc., the No.3 U.S. wireless carrier, reported higher-than-expected quarterly revenue and profit as its promotional offers helped add more subscribers. T-Mobile's total revenue jumped 23.4 percent to $10.18 billion. The company's net income rose to $390 million, or 45 cents per share, for the quarter from $297 million, or 34 cents per share, a year earlier. Analysts on average were expecting a profit of 30 cents per share and revenue of $9.84 billion for the quarter, according to Thomson Reuters I/B/E/S.


Hologic Inc. said on Tuesday that it would acquire medical esthetics company Cynosure Inc. for $1.65-billion to bolster its portfolio of women's health products. The deal comes a day after botox maker Allergan Plc said it would buy Cynosure's rival Zeltiq Aesthetics Inc. for about $2.48 billion.


Molson Coors Brewing Co. reported a 4.2 percent decrease in quarterly sales, due to a strong dollar and weak demand for its Coors Light beer, its highest-selling product. Its shares fell 2.7 per cent in premarket trading.


Earnings include: Agilent Technologies Inc.; American International Group Inc.; Buhler Industries Inc.; CAE Inc.; Ceres Global Ag Corp.; Devon Energy Corp.; Diamondback Energy Inc.; Discovery Communications Inc.; Dr Pepper Snapple Group Inc.; First Capital Realty Inc.; FirstEnergy Corp.; Keyera Corp.; Molson Coors Brewing Co.; Pan American Silver Corp.; T-Mobile US Inc.; Yellow Pages Ltd.

With files from wire services