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Before the Bell: Markets await Fed, Brexit developments

The Before the Bell report is compiled by editors of The Globe and Mail and is updated throughout the morning to reflect latest developments. Colin Cieszynski, Chartered Financial Analyst and Chartered Market Technician, is chief market strategist with CMC Markets.

Stock markets have been steady overnight with U.S. index futures down slightly while the FTSE and Dax are up slightly. The biggest move was in the Hang Seng, which staged a 1.1-per-cent catch up rally after underperforming last week.

This action feels like the calm before the storm with several major political, economic and monetary developments on the way this week.

The spotlight in currency trading today is on the UK pound with the Brexit bill back in the House of Commons, where MPs are expected to vote on whether to accept or reject the two House of Lords amendments. ‎PM Theresa May could be set to trigger Article 50 as soon as today and if not, likely one day this week, while SNP leader Nicola Sturgeon is expected to deliver another call for a second Scottish independence referendum.

The U.S. dollar is slipping back again today even though Friday's strong payroll and wage gains added to the case for multiple rate hikes this yearn starting this week. The greenback has been pricing in four hikes for several months now, and it appears some traders are taking profits against the news.

The Canadian dollar, meanwhile, is gaining ground on U.S. dollar. This indicates that the currency continue to benefit from Friday's very strong Canadian employment report that showed a 100,000 gain in full-time jobs.

Gold and the Japanese yen are also starting to regain their footing, but they also could be benefiting from increasing political risks. A diplomatic spat between the Netherlands and Turkey over the weekend has the potential to give a second wind to the Euroskeptic Freedom Party (PVV), who had been falling in the pools. Wednesday's  Dutch election has the potential to impact trading in the Euro through the week.

MARKET DATA:

Futures (as of about 7:30 a.m. ET)

Dow -0.04 per cent; S&P 500 -0.09 per cent; Nasdaq: -0.07 per cent; TSX 60 -0.23 per cent

Equities
Japan's Nikkei +0.15 per cent
Shanghai composite index +0.76 per cent
Hong Kong's Hang Seng +1.11 per cent 
Germany's DAX +0.02 per cent
London's FTSE +0.15 per cent
France's CAC 40 +0.00 per cent

Commodities
WTI crude oil (Nymex April) -0.60 per cent at $48.20 (U.S.) a barrel
Gold (Comex April) +0.52 per cent at $1,207.70 (U.S.) an ounce
Copper (Comex May) +1.37 per cent at $2.631 (U.S.) a pound

Currencies
Canadian dollar +0.09 at 74.33 cents (U.S.)
U.S. dollar index -0.09 at 101.24

Bonds
Canada 10-year bond yield -0.04 at 1.81 per cent

KEY ECONOMIC RELEASES

(10 a.m. ET) U.S. Federal Reserve Labor Market Conditions Index for February

KEY STOCKS TO WATCH

Earnings include: Earnings include: Airboss of America Corp.; Bird Construction Inc.; Black Diamond Group Ltd.; Energy Fuels Inc.; Fortuna Silver Mines Inc.; Journey Energy Inc.; Pollard Banknote Ltd.; Spin Master Corp.

Also see: Monday's small-caps to watch


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Toronto-Dominion Bank (TD-T) was down 0.75 per cent in premarket trading and closing down 5.6 per cent on Friday following a report employees were being pressured to meet high sales revenue goals.

Shares in TD, Canada's No. 2 lender fell to $66, its biggest one-day decline since early 2009.

**

Dow component Boeing Co. (BA-N) was down 1.5 per cent at $176 in premarket trading following a Morgan Stanley downgrade of the planemaker's stock to "equal-weight" from "overweight".

**

Shares of Mobileye (MBLY-N) soared 34.33 per cent to $63.50 in heavy premarket trading after chipmaker Intel said it would buy the driving assistant software maker for about $15.3 billion in equity value. Intel's shares were marginally lower, while shares other U.S. chipmakers rose slightly.

**

Japan's Toshiba Corp. is seeking to extend its Tuesday deadline for submitting official third-quarter earnings due to disagreements with auditors over issues at its U.S. nuclear unit Westinghouse, sources familiar with the matter said.

The extension would be its second for the earnings after Toshiba postponed a month ago to probe potential problems at Westinghouse. It has flagged a $6.3 billion writedown for the nuclear unit in preliminary estimates.

**

With files from wire services

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