OPENING CALL

Stock futures edged lower and bond yields rose early on Tuesday as traders returned after the Veterans Day holiday and isold Treasurys in anticipation that Donald Trump's policies may lift economic growth and boost inflationary pressures.

With inflation back in focus, the next test for investors markets is likely to be the consumer prices data due on Wednesday.

"[T]here's been some concern about another robust print, particularly after monthly core CPI was at a 6-month high in September," Deutsche Bank said.

"We'll have to see what that brings, but inflation expectations have risen quite a bit over the last couple of months, with the 2-year inflation swap up from just 1.99% on Sept. 10 to 2.62% yesterday, so another upside surprise would only accelerate that trend."

Though inflation has been declining, the new administration's proposals mean there is a risk of it increasing again, according to Bank of America.

"These risks stem from potential policy changes rather than economic fundamentals. Indeed, we see pro-growth fiscal policy, tariffs, and tighter immigration as potential sources of upside inflation risk over the coming years if they are implemented."

Premarket Movers

Grab Holdings rose 14% after it reported better-than-expected third-quarter profits and raised its forecast for annual revenue growth.

Live Nation Entertainment rose 6.1% after it reported third-quarter earnings that beat analysts' estimates.

MicroStrategy rose 2.3%, Coinbase gained 2.7%, and Robinhood Markets rose 2.3% as crypto-linked stocks extended their momentum with Bitcoin continuing to set record highs.

Tesla was up 0.8% after the company closed Monday with a gain of 9%, continuing its rally from last week.

Trump Media & Technology was down 6.2%. Shares rose 4.7% on Monday and have risen 91% this year.

Zeta Global was down 6.1% after it reported a third-quarter loss of 9 cents a share while analysts were calling for a loss of 6 cents.

Watch For:

Canada Building Permits for September; Home Depot, Suncor Energy, Tyson Foods earnings

Today's Headlines/Must Reads:

-The Outsider Trying to Restore Citi to Investment-Banking Glory

-Republican Euphoria Punctured by Tough Math in the House

-Economy or Culture Wars? Our Writers Spar Over Why Harris Lost

MARKET WRAPS

Forex:

The dollar hit a four-month high, boosted by the likelihood of Republican sweep following the elections, UBS Global Wealth Management said.

"A likely Republican red sweep has triggered a revival of the 'Trump trade,' fueling rallies across equities, bond yields and the dollar," UBS said.

The USD Index needs to break and hold above 105.70 for a decisive move toward 106.13 and 106.30, UOB Global Economics & Markets Research said. Descending trendline resistance connecting the highs of October 2023 and April 2024 is at 105.70.

Bitcoin hit a new record high, boosted by expectations that Trump will support the cryptocurrency sector, Swissquote Bank said.

Trump will likely remove the crypto-skeptics of government institutions and replace them with crypto-friendly regulators who will let the industry thrive in the U.S., Swissquote added.

If there's comprehensive and solid policy, banks could more comfortably integrate cryptocurrencies on their platforms and attract more institutional money.

"More demand should push the price of bitcoin, which has a limited supply, higher. Eyes are on the $100,000 mark and above."

Sterling fell after data showed the U.K. unemployment rate rose by more than expected and wage growth slowed, albeit slightly less than forecast.

"The higher unemployment rate could see the market start to price in a higher chance of a rate cut from the Bank of England next month," XTB said.

Bonds:

The underlying trend in long-term bond yields is still up, KBC Bank due to markets gearing for more fiscal stimulus on a global level.

"These short term growth and inflationary boosting measures come with a higher credit premium as well."

Candriam has taken a prudent stance on U.S. rates markets, being underweight.

"We think there will be a potential rise in rates and there will be a significant amount of volatility to accompany this."

Trump's policies will have upward pressure on inflation and be supportive of growth, albeit mitigated somewhat by tariffs, Candriam said.

However, the U.S. fiscal policy outlook currently remains unclear, it added.

Energy:

Oil prices were broadly stable despite ongoing investor disappointment over China's stimulus plans and a stronger dollar, with investors awaiting the monthly OPEC and IEA reports, as any further downgrades to demand-growth estimates could weigh on market sentiment.

The WTI crude oil price continues to be bearish, based on the daily chart, Forex.com and City Index said, with a "head and shoulders" formation appearing.

Metals:

Gold remained under pressure on multiple fronts, with institutional selloffs pushing it down nearly 3% since Monday, Pepperstone said, adding the trading narrative "has shifted sharply from risk-off hedging to an 'America First' stance."

The SPDR Gold Trust and other major institutions have been unloading holdings since November, while central banks have slowed gold purchases, Pepperstone said.

That's making gold's near-term outlook seem bleak. If U.S. CPI and retail sales this week beat views, the USD Index could tighten the screws further.

Trump's tapping of trade hawk Lighthizer has also fueled expectations of stricter tariffs, stronger USD and rising inflation that could make the Fed hesitant to cut rates, creating more headwinds for gold, Pepperstone said.

Base metals continued to weaken on the stronger dollar and disappointing stimulus measures from China, Sucden Financial said, adding that the greenback looks overbought and could weaken in the coming weeks.


TODAY'S TOP HEADLINES


Shell Wins Appeal Against Landmark Carbon-Emissions Ruling

A Dutch court ruled in favor of an appeal by Shell against a 2021 landmark decision that said it was partially responsible for climate change and must sharply cut its carbon emissions.

The ruling is a setback for efforts by nonprofits and other groups to hold energy companies and other multinationals responsible for the effects of climate change.


The Union Head Opposing a U.S. Steel Takeover-and Some of His Members

For months, Dave McCall has lobbied union members and politicians to oppose a takeover of U.S. Steel, betting the company's 10,000 union members would be better off with domestic owners instead of Japan's Nippon Steel.

The United Steelworkers boss could soon learn whether his crusade will pay off. Cracks in the union's solidarity have opened, though, as some members back the deal.


Bayer Cuts Earnings Target, Posts Net Loss on Agriculture Weakness

Bayer cut its full-year earnings target after a tough agricultural market hit its crop-science division, and said it heads into next year with a muted outlook and likely declining earnings.

The German conglomerate said it is cautious on the agricultural market environment in 2025, warning that its crop-protection business will remain under pressure due to regulatory challenges and generic competition.


Europe Must Not Be 'Unprepared' For Trade War, ECB's Rehn Says

Higher barriers to trade would have a negative impact on the global economy, and Europe must be prepared for increased tensions, Bank of Finland Governor Olli Rehn said Tuesday.

Rehn, who is a member of the European Central Bank's governing council, said a soft landing for the eurozone economy was still a "plausible" scenario, but that the outlook is clouded by growing geopolitical uncertainty.


Former BOJ Member Weighs in on Political Headwinds Facing Japan Central Bank

TOKYO-Recent elections in Japan and the U.S. have complicated views on the timing of the Bank of Japan's next move.

Donald Trump's re-election has raised concern that new policies could spark another trade war and rekindle inflation, with ripple effects for global economies and markets.


Democrat Ruben Gallego Defeats Kari Lake in Arizona Senate Race

WASHINGTON-Democratic Rep. Ruben Gallego defeated Republican Kari Lake in the Arizona Senate contest, keeping the seat in the Democratic column and preventing Republicans from further expanding their majority in the next Congress.

With an estimated 95% of the vote reporting, Gallego had earned 50% to Lake's 47.8%.


Loyalty Is Common Thread as Trump Fills Foreign Policy, Immigration Jobs

WASHINGTON-President-elect Donald Trump is stocking his cabinet and White House staff with loyalists with deep congressional experience who back his agenda on immigration and foreign policy-mostly shunning establishment Republicans whom he blames for thwarting his first-term goals.

In the clearest example yet, Trump has asked Rep. Mike Waltz (R., Fla.), a former Army Green Beret who shares the former president's views on illegal immigration and skepticism of America's support for Ukraine, to be his national security adviser, according to people familiar with the discussion. The job, which Trump has elevated to cabinet rank, doesn't require Senate confirmation.


Write to paul.larkins@dowjones.com TODAY IN CANADA

Earnings [3Q Unless Stated Otherwise]:

Aris Mining

Bitfarms

CAE 2Q

Cardiol Therapeutics

Computer Modelling 2Q

Converge Technology

DATA Communications

dentalcorp

Finning International

GDI Integrated Facility

HealWELL AI

Linamar

Martinrea International

NGEx Minerals

Orla Mining

Peyto Exploration

Power Corp of Canada

Shopify

Suncor Energy

VerticalScope

Westport Fuel

Economic Calendar (ET):

0830 Sep Building Permits

Stocks to Watch:

MCAN Mortgage 3Q EPS C$0.70

Nexus Industrial REIT 3Q Loss C$46M

RioCan REIT 3Q Rev C$364.3M; Backs 2024 FFO C$1.79/Shr-FFO C$1.82/Shr; FFO View Excludes 4Q Restructuring Chg Following Reorganization Subsequent to Qtr End

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11-12-24 0614ET