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Note to readers: Before the Bell newsletter will pause on Monday for the Thanksgiving holiday and return Tuesday.
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Global markets edged lower as escalating U.S.-China economic tensions and uncertainty about political developments in Japan sapped investor confidence.
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Wall Street futures were mixed after U.S. markets closed lower yesterday as the U.S. government shut down meant no new data to assess the economy.
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TSX futures edged lower after Canada’s main stock market saw its biggest decline in more than two months yesterday. Canadian markets will be closed Monday for the Thanksgiving holiday.
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In Canada, investors are getting results from MTY Food Group Inc.
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Doubts began to emerge on whether Japanese prime minister-in-waiting Sanae Takaichi could repeat the pro-market policies of the late Shinzo Abe after reports the Komeito party will leave the ruling coalition.
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“Political and economic conditions in Japan are quite different today than in 2012 when Abenomics was first launched,” analysts at Alpine Macro wrote in a research report. “The lack of a parliamentary majority, an independent [central bank], and voters’ anger with higher inflation should prevent Takaichi from pursuing aggressive reflationary policies.”
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Overseas, the pan-European STOXX 600 was down 0.22 per cent in morning trading. Britain’s FTSE 100 slid 0.15 per cent, Germany’s DAX declined 0.24 per cent and France’s CAC 40 was flat.
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In Asia, Japan’s Nikkei closed 1.01 per cent lower, while Hong Kong’s Hang Seng dropped 1.73 per cent.
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Oil prices declined after settling about 1.6 per cent lower yesterday, as the market’s risk premium faded after Israel and Hamas agreed to the first phase of a plan to end the war in Gaza.
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Brent crude futures were down 0.25 per cent at US$65.06 a barrel. West Texas Intermediate (WTI) crude slipped 0.11 per cent to US$61.44.
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“Finally having some kind of peace process in the Middle East is lowering the shoulders a little bit,” said Bjarne Schieldrop, chief commodities analyst at SEB. This could ease fears about crude carriers passing through the Suez Canal and the Red Sea, he said.
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In other commodities, spot gold rose 0.5 per cent to US$3,992.97 an ounce, but has climbed 2.3 per cent this week. U.S. gold futures for December delivery rose 0.8 per cent to US$4,005.30.
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The Canadian dollar strengthened against its U.S. counterpart.
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The day range on the loonie was 71.25 US cents to 71.36 US cents in early trading. The Canadian dollar was down about 1.22 per cent against the greenback over the past month.
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The U.S. dollar index, which weighs the greenback against a group of currencies, slid 0.23 per cent to 99.31.
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The euro rose 0.16 per cent to US$1.1584. The British pound edged down 0.05 per cent to US$1.3297.
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In bonds, the yield on the U.S. 10-year note was last down at 4.112 per cent.
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*Note: Several scheduled U.S. data reports may not be released if the U.S. government shutdown isn’t resolved.
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8:30 am ET: Canada employment report for September. Consensus is for a net loss of 2,500 jobs, an improvement from August’s decline of 65,500 jobs. The unemployment rate is expected to rise to 7.2 per cent from 7.1 per cent. Average hourly earnings are expected to be up 3.2 per cent from a year earlier, a steady reading.
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10 am ET: University of Michigan consumer sentiment for October, which is expected to see a modest improvement from last month.
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2 pm ET: U.S. budget balance (tentative)
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With Reuters and The Canadian Press
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