Everything You Need to Know on Tuesday: Statistics Canada to Release July Inflation Figures Today

Good morning mooers! Here are things you need to know about today's market:

● S&P/TSX 60 Index Standard Futures are trading at 1,386.40, down 0.10% from previous close

● Statistics Canada to release July inflation figures today

● Canadian dollar climbs to 5-week high ahead of inflation data

● Couche-Tard seeks to buy US$31 billion owner of 7-Eleven chain

Today, the Canadian dollar is trading at 73.11 cents US, a slight increase as previous close.

S&P/TSX 60 Index Standard Futures are trading at 1,386.40, down 0.10% from previous close.

Statistics Canada is set to publish its July consumer price index report today.

Economists polled by Reuters expect the report to show inflation slowed to 2.5 per cent from 2.7 per cent in June.

Price pressures in Canada have steadily eased this year, bringing the annual inflation rate below three per cent since January.

The Bank of Canada has been encouraged by this progress and lowered its key interest rate at its last two decision meetings.

Governor Tiff Macklem has signalled more rate cuts are coming, as long as inflation continues to slow.

The Bank of Canada’s next interest rate announcement is scheduled for Sept. 4.

The Canadian dollar strengthened to a five-week high against its U.S. counterpart on Monday as hopes the U.S. economy could avoid recession bolstered sentiment and ahead of domestic inflation data that could guide expectations for Bank of Canada rate cuts.

The loonie was trading 0.3% higher at 1.3640 to the U.S. dollar, or 73.31 U.S. cents, after touching its strongest intraday level since July 15 at 1.3636.

"The Canadian dollar, which increasingly functions as a proxy for global risk appetite, is gaining as investors pile into 'soft landing' bets and could continue to do so if tomorrow's domestic inflation data leaves monetary policy expectations broadly unchanged," said Karl Schamotta, chief market strategist at Corpay.

The S&P 500 and the Nasdaq rose for an eighth straight session as concerns around an impending U.S. recession abated and markets zeroed in on Federal Reserve Chair Jerome Powell's speech at Jackson Hole later this week.

"Powell is expected to join private-sector observers in acknowledging growing downside risks in U.S. labour markets while pointing to a sustained moderation in inflation pressures - conditionally setting the stage for a rate cut at the central bank's September meeting." Schamotta said.

Valued at the equivalent of US$31 billion before news of the offer emerged, Seven & i shares jumped 23% on Monday. The company said the bid was preliminary and non-binding, without disclosing terms. A special committee of independent outside directors will make a “prompt, careful and comprehensive review of the proposal,” Seven & i said in a statement Monday.

Couche-Tard confirmed it made a “friendly, non-binding proposal” but gave no details, and said it’s not certain an agreement will be reached.

Although Couche-Tard is smaller than Seven & i, with about 16,700 stores compared with more than 85,000 for the Japanese retailer, the Canadian company enjoys a bigger valuation of about $58.5 billion. Foreign takeovers of Japanese companies are extremely rare, but recent changes in guidelines for merger and acquisition proposals, and activist investors pushing companies to boost value — including at Seven & i — could boost the odds of a deal that would create a global convenience-store behemoth.

“It all depends on the price, and I guess the weak yen has made it more attractive and anything north of ¥7 trillion, the management would have a tough time rejecting,” said Amir Anvarzadeh, a strategist at Asymmetric Advisors Pte. “But knowing the Seven & i management, you can bet on them resisting this if the price is lower.”