TORONTO - The Toronto stock market looked to start off lower as traders await major data releases this week that are expected to confirm the underlying strength of the U.S. economy.
The Canadian dollar was down 0.2 of a cent to 93.63 cents US on Monday, while Statistics Canada said the economy grew by 0.1 per cent in April, the same pace as in March.
U.S. futures were lower with the Dow Jones Industrial futures down 25 points to 16,851.84, the Nasdaq futures down a point to 3,844.44, while the S&P 500 futures were declined 2.50 points to 1,960.96.
Traders are awaiting two key reports in the U.S. this week _ the Institute for Supply Management's June reading on the manufacturing sector Tuesday and the U.S. government's employment report for last month, which is being released on Thursday. It is also hoped that the flood of corporate earnings reports covering the April-June period will provide reassurance that the American economy is improving.
Canadian jobs data for June won't be released until Friday, July 11 because of the Canada Day holiday on Tuesday, when the TSX will be closed. It is also a short trading week in the U.S., with markets closed July 4 for Independence Day.
In Europe, the inflation rate across the 18-country eurozone languished at a low of 0.5 per cent in June, official figures showed Monday, adding urgency to the European Central Bank's recently announced measures to help the economy.
Analysts were on average expecting inflation in the eurozone to edge up to 0.6 per cent, according to financial data provider FactSet. A closer look at the figures released by the European Union's statistics agency shows the core inflation rate, which excludes volatile food and fuel costs, rose slightly to 0.8 per cent from 0.7 per cent in May. The European Central Bank wants the headline inflation rate to be just under 2 per cent.
Some economists warn the persistently low inflation rate can hurt growth. In a worst case, an extended drop in prices could cause a deflationary spiral, which can choke off growth and take years — if not decades — to break out of.
Also on Tuesday, a preliminary reading of Chinese factory activity will give investors the latest gauge of the slow down in China, the world's biggest energy consumer.
In corporate news, a group of GM Canada dealers is suing the company and its parent General Motors Co., saying the automaker has ignored their repeated calls for financial help to address a drop in sales and market share.
On the commodity markets, the August crude contract on the New York Mercantile Exchange was down 54 cents to US$105.20 a barrel.
August bullion was down $5.80 to US$1,314.2 an ounce, while September copper was US$3.16, down less than a penny.