Equities
Global shares slid after U.S. President Donald Trump threatened additional tariffs on eight European countries until the United States was allowed to buy Greenland, reigniting trade tensions.
TSX futures followed sentiment lower as investors assessed inflation figures for December.
Consumer prices rose at a faster-than-expected annual pace of 2.4 per cent, largely due to the base-year effect from last year’s sales tax break, but closely watched core measures of inflation cooled for the third consecutive month, data showed.
U.S. markets are closed today for the Martin Luther King Jr. holiday.
“There is obviously a response [in financial markets] to the new tariff threats,” said George Lagarias, chief economist at Forvis Mazars.
“It’s highly likely that the White House will use the threat of tariffs consistently, even when deals have previously been agreed.”
Overseas, the pan-European STOXX 600 was down 1.21 per cent in morning trading. Britain’s FTSE 100 dropped 0.48 per cent, Germany’s DAX declined 1.29 per cent and France’s CAC 40 gave back 1.5 per cent.
In Asia, Japan’s Nikkei closed 0.65 per cent lower, while Hong Kong’s Hang Seng fell 1.05 per cent.
Commodities
Oil prices fell as civil unrest in Iran subsided, reducing the likelihood of a U.S. attack that could disrupt supply from the major producer, while the market also tracks the escalating standoff over Greenland.
Brent crude futures declined 0.62 per cent to US$63.79 a barrel. West Texas Intermediate (WTI) for February dropped about 0.74 per cent to US$59 a barrel. The contract expires tomorrow and the more active March contract traded at US$58.98, down 0.61 per cent.
“The overriding sentiment of caution is due to the influence on how any expansion of a trade war, because of the U.S. and European fallout over Greenland, will have on global trade and by default, oil demand,” said PVM Oil Associates analyst John Evans.
In other commodities, spot gold jumped 1.5 per cent to US$4,662.85 an ounce after scaling an all-time high of US$4,689.39. U.S. gold futures for February delivery advanced 1.6 per cent to US$4,668 an ounce.
Currencies and bonds
The Canadian dollar strengthened against its U.S. counterpart.
The loonie was trading at about 72.01 US cents, up roughly 0.2 per cent on the day. The Canadian dollar was down about 1 per cent against the greenback over the past month.
The U.S. dollar index, which weighs the greenback against a group of currencies, fell 0.26 per cent to 99.14.
The euro gained 0.19 per cent to US$1.1631. The British pound advanced 0.23 per cent to US$1.3410.
The U.S. bond market was closed for holiday.
Economic news
China GDP, retail sales, industrial production and fixed asset investment. Beijing reported it had hit its full-year GDP growth target of 5 per cent despite the trade war with the U.S.
Japan core machine orders and industrial production
Euro zone CPI
8:30 a.m. ET: Canadian CPI for December. The annual inflation rate accelerated to 2.4 per cent, compared with forecasts for it hold steady at 2.2 per cent.
8:30 a.m. ET: Canadian new motor vehicle sales for November. Estimate is a year-over-year drop of 9.5 per cent.
8:30 a.m. ET: Canadian household and mortgage credit for November.
8:30 a.m. ET: Bank of Canada’s Business Outlook Survey and Survey of Consumer Expectations for Q4 are released.
With Reuters and The Canadian Press
