Opening Bell: U.S. Futures Hold Ground Despite Bleak IMF Outlook; Oil Pops

Key Events

Europe's STOXX 600 and futures on the S&P 500, Dow and NASDAQ 100 crawled higher this morning, following a mixed Asian session dominated by the effect of new tariff threats from the White House and by a further reduction, from the International Monetary Fund, of the global economic outlook—to the lowest level since the 2008 financial crisis.

Japan’s Nikkei 225 (-0.53%) and Hong kong’s Hang Seng (-0.13%) slid lower, while China’s Shanghai Composite (+0.07%) and South Korea’s KOSPI (+0.49%) edged higher.

Global Financial Affairs

In Tuesday’s U.S. session, equities ended the longest winning streak in a year and a half, as investors sought safety and rotated into Treasurys amid concerns of a slowing economy and lingering trade tensions.

The S&P 500 (-0.61%) halted a nine-day rally, after U.S. President Donald Trump's threats of higher tariffs on a batch of European goods hit multinationals stocks such as Caterpillar (NYSE:CAT) particularly harshly. Airlines shares led by Boeing (NYSE:BA) remained under pressure after Trump's move re-ignited a 15-year long dispute with Europe over aircraft subsidies that sees the U.S. plane company pit against Franco-German rival Airbus (PA:AIR). Materials stocks also dragged the Dow Jones lower (-0.72%), while energy producers took a hit from the bleak outlook posted by the IMF.

Meanwhile, yields on 10-year Treasurys fell below the psychological 2.5% level, though it could just be part of a falling flag—bullish after this month's rebound.

In FX trading, the pound ticked higher on reports that EU ministers meeting today to deliberate on a second Brexit delay may be leaning towards a one-year postponement.

Oil surged paring yesterday’s losses, on signs of tighter global supplies, which offset the downward price effect of Russia’s recent caution against setting out further output cuts.

Up Ahead

• U.S. banks begin reporting first-quarter earnings, led by JPMorgan (NYSE:JPM) and Wells Fargo (NYSE:WFC).
• The spring meetings of the World Bank Group and the IMF continue in Washington.
• The Federal Reserve release minutes of its March meeting Wednesday.
• The ECB will probably leave its key interest rates unchanged Wednesday. Investors will be looking for further details on TLTRO.

• Canadian New Housing Price Index is released Thursday.

Market Moves

Stocks

• Canada’s S&P/TSX Composite closed up 0.22 percent Tuesday.

• The Federal Reserve release minutes of its March meeting on Wednesday.
• The ECB is expected to leave its key interest rates unchanged on Wednesday. Investors will be looking for further details on the central bank's TLTRO programme.
• U.S. banks begin reporting first-quarter earnings, led by JPMorgan (NYSE:JPM) and Wells Fargo (NYSE:WFC) on Friday.

Currencies

• The Canadian loonie was down 0.11 percent against the U.S. greenback early Wednesday, trading at 0.7494.

• The Dollar Index slid less than 0.05%.
• The euro increased 0.1% to $1.1269.
• The British pound gained 0.2% to $1.3073.
• The Japanese yen was unchanged at 111.14 per dollar.

Bonds

• Canada’s 10-year yield was down early Wednesday at 1.703, a 1.56-percent decrease.

• The yield on 10-year Treasurys slipped one basis point to 2.49%, the lowest in more than a week.
• Germany’s 10-year yield dropped less than one basis point to -0.01%.
• Britain’s 10-year yield was unchanged at 1.104%.
• Japan’s 10-year yield fell one basis point to -0.053%.

Commodities

• West Texas Intermediate crude gained 0.4% to $64.23 a barrel.
• Gold rose less than 0.05% to $1,304.45 an ounce.
• The Bloomberg Commodity Index climbed 0.1%.