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Premarket: Stock futures rise as commodities swing higher

Stock futures suggest modest gains at the open for U.S. and Canadian markets. It's an active morning ahead of the start of regular trading, with the European Central Bank announcing a 25-basis-point cut in its interest rate to 0.5 per cent, while several more key corporate earnings reports are being released.

The rate cut was widely expected and European markets held steady in the moments after the action. ECB President Mario Draghi will hold a follow-up news conference shortly to discuss the rate cut and his latest take on the European economy.

Recent contractions in the German manufacturing and services sectors and a decline in euro-zone April inflation to 33-month lows gave economists confidence that the central bank would ease monetary policy. As such, the cut was mostly already factored into market prices.

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But market sentiment this week is on shaky ground, with both the TSX and the Dow suffering triple-digit losses on Wednesday. The Federal Reserve did the expected and maintained its $85-billion (U.S.) monthly bond-buying program, but added fresh language that was aimed at giving it more flexibility to alter the pace of those purchases in the future. That heightened concerns that the U.S. economy can't rely on quantitative easing measures to ignite growth for much longer.

Most commodity prices are higher this morning, reversing some of their losses on Wednesday, which should be supportive for the resource-heavy TSX.

Here's a look at what else is happening this morning and what's to come.

MARKETS:

Equities:

U.S. futures: S&P Toronto 60 +0.2 per cent; S&P 500 +0.4 per cent; Dow +0.3 per cent; Nasdaq +0.4 per cent

Hong Kong's Hang Seng -0.30 per cent

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Shanghai composite index -0.18

Japan's Nikkei -0.76 per cent

London's FTSE 100 -0.16 per cent

Germany's DAX +0.28 per cent

France's CAC 40 -0.23 per cent

Italy's FTSE MIB -0.35 per cent

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Commodities:

WTI crude oil (Nymex Jun) +0.56 per cent at $91.52 (U.S.) a barrel

Gold (Comex Jun) +0.57 per cent at $1,454.40 (U.S.) an ounce

Silver (Comex July) +1.17 per cent at $23.62 an ounce.

Copper (Comex July) +1.36 per cent at $3.12 (U.S.) a pound

Currencies:

Canadian dollar up 0.0010, or 0.10 per cent, at $0.9927 (U.S.)

ECONOMIC INDICATORS TO WATCH:

(830 a.m. ET) Statistics Canada reports in the international merchandise trade balance in March. Economists a deficit of $700-million.

(830 a.m. ET) U.S. releases jobless claims for last week. They are forecast to climb to 345,000 from 339,000 the previous week.

(830 a.m. ET) The U.S. Labour Department reports on non-farm productivity and unit labour costs in the first quarter. Economists expect a rise of 1.5 per cent and 0.5 per cent, respectively.

(830 a.m. ET) The U.S. Commerce Department reports on the trade balance in March. Economists expect a deficit of $42-billion (U.S.).

STOCKS TO WATCH:

Facebook shares are up 1 per cent in the premarket after late Wednesday reporting adjusted profit 1 cent below analysts' expectations, with mobile ad revenue at the higher end of the range analysts expected.

Manulife Financial Corp. reported core earnings of 32 cents a share, in line with analysts' estimates.

General Motors earned 67 cents per share in the latest quarter. Analysts were expecting 54 cents. Shares are up 3.7 per cent.

Other earnings today include: American International Group Inc.; Bayerische Motoren Werke AG; Brookfield Residential Properties Inc.; Canadian Natural Resources Ltd.; CCL Industries Inc.; CME Group Inc.; Eldorado Gold Corp.; Fairfax Financial Holdings Ltd.; Gildan Activewear Inc.; Goldcorp Inc.; Great-West Lifeco Inc.; Inmet Mining Corp.; International Paper Co.; Kellogg Co.;Maple Leaf Foods Inc.; Marsh & McLennan Cos. Inc.; MDC Holdings Inc.; Mega Brands Inc.; Newalta Corp.; Penn West Petroleum Ltd.; Petrobakken Energy Ltd.; Royal Dutch Shell PLC; Russel Metals Inc.; Siemens AG; Sierra Wireless Inc.; SNC Lavalin Group Inc.; Valeant Pharmaceuticals International Inc.; Westport Innovations Inc.

THIS MORNING'S TOP INVESTING READS ON THE WEB:

London's legendary department store Selfridges singled out Research In Motion Ltd.'s new BlackBerry Q10 model as its "fastest-ever selling" technology product at a launch on Saturday, but analysts remain unconvinced that this high demand will help the mobile maker remain relevant.

Defensive sectors have at last started to lag.

More negative divergences that are creating concerns for the bull case.

Mega-caps are the original low-volatility stocks.

A better way to hunt to U.S. dividend yields.

A neat tool on how to easily compare any two Federal Reserve statements since 2007.

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The premarket report is constantly updated to reflect the latest news developments and market moves. For instant headlines on breaking economic and corporate news in the premarket, follow Darcy Keith on Twitter at @eyeonequities.

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About the Author
Investment Editor

Darcy Keith is The Globe and Mail's Investment Editor. He has been a business journalist since 1992 and joined the Report on Business in 2010 from Yahoo! Canada, where he was the senior editor of finance. More

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