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Canada’s main stock index added to the previous session’s advance at Tuesday’s opening bell with energy and bank stocks gaining amid a tamer-than-expected reading on inflation. On Wall Street, key indexes were also positive as jitters over the health of the global banking sector eased.

At 9:31 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 184.2 points, or 0.94per cent, at 19,703.63.

In the U.S., the Dow Jones Industrial Average rose 176.13 points, or 0.55per cent, at the open to 32,420.71.

The S&P 500 opened higher by 24.32 points, or 0.62per cent, at 3,975.89, while the Nasdaq Composite gained 89.25 points, or 0.76per cent, to 11,764.79 at the opening bell.

“The failure of two U.S. regional banks and vapid concerns about Credit Suisse completely turned risk appetite off,” Stephen Innes, managing partner with SPI Asset Management, said.

“The sell-off in banks has led to a high level of market stress. And while spillovers from bank stress have been relatively ringfenced so far, U.S. recession risk has sharply increased due to a lightning-speed reassessment of the FOMC policy path.”

Fed members begin their two-day meeting today, culminating with tomorrow’s rate announcement. In the wake of crisis in the global banking sector, including the emergency rescue of Credit Suisse by UBS on the weekend, markets have been reevaluating expectations on what the Fed will do. Markets are now pricing in about a quarter-point rate increase with about a 25-per-cent chance of the central bank holding steady.

“What this episode has done is force central banks and investors to question whether the previous path for interest rates is still warranted,” OANDA senior analyst Craig Erlam said.

“The pace at which interest rates have risen around the world was always likely to cause problems and central banks must now evaluate whether the costs still outweigh the benefits.”

In Canada, markets got a tamer-than-expected reading on price pressures in February. Statscan says the annual rate of inflation in February eased to 5.2 per cent, from 5.9 per cent in January. Economists had been expecting the February number to come in closer to 5.4 per cent. On a monthly basis, consumer prices rose 0.4 per cent, less than the 0.5 per cent economists had been forecasting.

“There was nothing in today’s inflation report that would move the Bank of Canada off of its pause on interest rate moves,” TD senior economist Leslie Preston said.

“Unlike the Federal Reserve, domestic inflation trends mean the BoC can ride out the current volatility in financial markets driven by stresses in the banking sector internationally.”

The report comes ahead of next week’s federal budget.

The Globe’s Bill Curry reports the federal government will “invest aggressively” in clean technology, Finance Minister Chrystia Freeland said Monday during a prebudget event in which she outlined the main themes of the economic plan.

Overseas, the pan-European STOXX 600 was up 1.51 per cent by midday. Britain’s FTSE 100 rose 1.61 per cent. Germany’s DAX and France’s CAC 40 advanced 1.74 per cent and 1.68 per cent, respectively.

In Asia, Hong Kong’s Hang Seng ended up 1.36 per cent. Markets in Japan were closed for a public holiday.


Crude prices recouped early losses and traded higher as a relief rally holds in broader markets and traders await the Fed’s rate decision.

The day range on Brent was US$72.82 to US$74.61 in the early premarket period. The range on West Texas Intermediate was US$66.77 to US$68.42.

Both benchmarks saw a volatile session on Monday, falling about US$3 a barrel at one point, before finishing up.

“The sell-off in oil markets appears to be running into support following the near-20-per-cent decline over the last couple of weeks,” OANDA’s Craig Erlam said.

“Traders have been forced to reassess the outlook for the global economy in light of recent issues in the banking sector and it would appear they’re no longer so optimistic.”

However, he said, that may change as market volatility wanes “but for now, they’re taking a far more cautious stance.”

“Brent saw support around $70 and in recent days has bounced back strongly from early sell-offs, which could suggest a rebound is on the cards,” he said.

Later in the session, traders will get the first of two weekly U.S. inventory reports with new numbers from the American Petroleum Association. More official U.S. government figures follow on Wednesday morning.

An early Reuters survey suggests crude oil and product inventories in the U.S. were likely to have fallen last week.

In other commodities, gold prices edged lower on Tuesday ahead of the Fed’s policy meeting and expectations that rate hikes will slow.

Spot gold was down 0.2 per cent at US$1,975.71 per ounce by early Tuesday morning. U.S. gold futures eased 0.1 per cent to US$1,980.10. On Monday, gold saw a choppy session, at one point hitting their highest since last March at US$2,009.59.


The Canadian dollar was relatively steady, trading above the 73-US-cent mark early Tuesday morning, while its U.S. counterpart took a breather ahead of the Fed rate decision.

The day range on the loonie was 72.99 US cents to 73.20 US cents in the predawn period.

On world markets, the U.S. dollar index, which weighs the greenback against a group of currencies, rose 0.06per cent to 103.40.

The U.S. dollar edged up about 0.1 per cent to US$1.0712 per euro and advanced a bit further on the Australian and New Zealand dollars, according to figures from Reuters. It held at 131.24 yen, just above a five-week low at 130.55.

Britain’s pound slid 0.1 per cent to US$1.2260 in early trading.

In bonds, the yield on the U.S. 10-year note was up modestly at 3.524 per cent.

More company news

BlackBerry Ltd said on Tuesday it would sell patents, primarily related to its mobile devices, for up to US$900-million after the Canadian software company scrapped an earlier deal with Catapult IP Innovations Inc. Malikie Innovations Ltd will buy the patents and pay $170 million in cash on deal closing, and another $30 million three years later. BlackBerry will also get annual cash royalties from the profits generated from the patents, relating to its messaging and wireless networking among others. -Reuters

U.S.-based buyout fund KKR has agreed to sell a 50-per-cent stake in Spanish renewable energy company X-elio to Canadian asset manager Brookfield, the two funds said on Tuesday. Brookfield already owns the other half of X-elio. Transaction details weren’t disclosed. -Reuters

JPMorgan Chase & Co CEO Jamie Dimon is leading talks with the chiefs of other big banks about fresh efforts to stabilize First Republic Bank, the Wall Street Journal reported on Monday, citing people familiar with the matter. The banks are considering an investment into First Republic, the report said. The rescue plan could involve converting some or all of the $30 billion the lenders deposited in the troubled lender last week into a capital infusion, the report added. -Reuters

Canada’s Ritchie Bros Auctioneers Inc said it had completed the acquisition of U.S. auto retailer IAA Inc, weeks after two proxy advisory firms urged shareholders to reject the $7-billion deal. The company, which auctions and sells used heavy industrial equipment, last week saw its shareholders vote in favor of the acquisition despite the pushback from Institutional Shareholder Services and Glass Lewis. -Reuters

Economic news

830 am ET: Canada’s consumer price index for February.

Quebec and New Brunswick budgets

10 am ET: U.S. existing home sales for February.

With Reuters and The Canadian Press