World stock markets were little changed on Tuesday while the U.S. dollar rose slightly against a basket of major currencies, with only muted impact from the long-awaited U.S.-North Korea summit aimed at denuclearizing the Korean peninsula.
U.S. President Donald Trump and North Korean leader Kim Jong Un met in Singapore, pledging to work toward complete denuclearization, while Washington committed to providing security guarantees for its old enemy.
The MSCI all-country world index, which tracks shares in 47 countries, shed 0.07 per cent in afternoon trading, after modest gains earlier.
The dollar index rose 0.21 pe rcent, steadied in part by data on Tuesday showing U.S. consumer prices increased in May amid a slowdown in the rise of gasoline costs.
The euro was down 0.25 per cent to $1.1752.
U.S. crude rose 0.39 per cent to settle at $66.36 per barrel, and Brent settled at $75.88, down 0.76 per cent, as investors prepared for a key meeting of the OPEC producer group next week.
Investors had mixed reactions to the North Korea summit, which ended with the signing of a joint statement that gave few details on how the goals set by both sides would be achieved.
“Any de-escalation is good, because in the background you always have worries about these situations,” said Ian Ormiston, a fund manager with Old Mutual Global Investors European.
Others felt the sit-down between Mr. Trump and Mr. Kim did little to change the game.
“Markets are skeptical,” said Brad McMillan, chief investment officer for Commonwealth Financial in Waltham, Massachusetts. “This is more of a case of ‘we’ll believe it when we see it,’ rather than actually reacting.”
Buyers of equities and government bonds seemed more interested in other matters. Along with the positive U.S. inflation data, investors were focused on the kick-off of a two-day U.S. Federal Reserve meeting, with the Fed expected to raise interest rates, as well as policy meetings later this week of the European Central Bank and the Bank of Japan.
“We’re eagerly awaiting the Fed, the ECB and the BOJ, in that order,” said Gregory Anderson, global head of FX strategy at BMO Capital Markets in New York. “People are reluctant to do a whole lot ahead of that.”
Futures contracts indicate a 96-per-cent probability the fed funds rate will be raised a quarter of a percentage point on Wednesday, according to CME Group.
Benchmark 10-year U.S. Treasury notes last /32 in price to yield 2.9571 per cent, from 2.957 perc ent late on Monday.
The 30-year bond last rose 4/32 in price to yield 3.0911 per cent, from 3.097 per cent Monday.
Canada’s main stock index edged higher on Tuesday despite a decline in energy shares after OPEC cited a high degree of uncertainty regarding the global oil market this year.
The Toronto Stock Exchange’s S&P/TSX Composite index finished up 25.69 points, or 0.16 per cent, at 16,288.98.
Ten of the index’s 11 major sectors were higher on the day, while the energy sector fell 0.9 per cent.
Shares of Suncor Energy Inc. lost 2.9 per cent, while Imperial Oil Ltd. was down 1.2 per cent.
Wall Street’s main equity indexes were mixed but steady, with the Dow Jones Industrial Average falling 1.58 points, or 0.01 per cent, to 25,320.73, the S&P 500 gaining 4.85 points, or 0.17 per cent, to 2,786.85 and the Nasdaq Composite adding 43.87 points, or 0.57 per cent, to 7,703.79.
Twitter Inc. pared gains but still traded up 5 per cent after J.P. Morgan raised its price target by $11 to $50.
Tesla, too, lost some early momentum after the company said it was laying off about 9 per cent of its workforce. Even so the shares were up 3.2 per cent after Keybanc raised its estimates for Model 3 deliveries for the second quarter and full-year. Tesla said the job cuts would not endanger the ramp-up of production of the Model 3.
In Europe, the regional FTSEurofirst 300 index lost 0.02 per cent.
The spread between Italian and German 10-year borrowing costs narrowed as the U.S.-North Korea summit drew to a close, following a rally on Monday after reassuring comments from Italy’s new economy minister.
The European Central Bank meets on Thursday, with some expecting it to provide guidance for ending its bond-buying program at the end of this year.
Reuters