Global markets were muted following yesterday’s rally, as investors evaluated a ⁠range of ​corporate earnings reports while monitoring the evolving situation in the Middle East.

Wall Street futures were in negative territory, while TSX futures followed sentiment lower.

On Wall Street, markets are watching earnings from ASML Holding NV, Bank of America Corp., Morgan Stanley and Progressive Corp.

Analysts ‌at Deutsche Bank wrote that the Middle East developments, including U.S. President Donald Trump saying that talks ‌with Iran ​could resume within the next two days, had eased investor fears about a stagflationary shock. They noted that ”investors continue to believe the conflict will be a temporary one.”

Overseas, the pan-European STOXX 600 was little changed in morning trading. Britain’s FTSE 100 was flat, Germany’s DAX climbed 0.14 per cent and France’s CAC 40 declined 0.55 per cent.

In Asia, Japan’s Nikkei closed 0.44 per cent higher, while Hong Kong’s Hang Seng rose 0.29 per cent.

Oil prices drifted higher as investors assessed prospects for renewed U.S.–Iran ​talks and the potential for supply to be released ‌from the Middle East, where exports remain constrained by the closure of the Strait of Hormuz.

Brent crude futures were up 1.1 per cent to US$95.83 a barrel. ​West Texas Intermediate (WTI) crude climbed 0.8 per cent to US$92.03.

“The trajectory of oil prices will likely ​hinge less on battlefield developments and more on diplomatic momentum. ⁠Markets are increasingly reacting to headlines around negotiations rather than troop deployments,” said Priyanka Sachdeva, ⁠senior market analyst at Phillip Nova.

“Each signal of renewed dialogue has been met with price declines, suggesting that traders are ​systematically unwinding the ‘war premium’ embedded into crude earlier this month.”

In other commodities, spot gold was down 0.9 per cent to US$4,798.89 an ounce. U.S. gold futures for June delivery fell 0.6 per cent to US$4,821.30.

The Canadian dollar weakened against its U.S. counterpart.

The day range on the loonie was 72.55 US cents to 72.67 US cents in early trading. The Canadian dollar was down about 0.33 per cent against the greenback over the past month.

The U.S. dollar index, which weighs the greenback against a group of currencies, edged up 0.06 per cent to 98.18. The U.S. dollar traded at $1.3778.

The euro slid 0.16 per cent to US$1.1779. The British pound declined 0.13 per cent to US$1.3550.

In bonds, the yield on the U.S. 10-year note was last up at 4.270 per cent.

Japan’s core machine orders

Euro zone’s industrial production

8:30 a.m. ET: Canadian manufacturing sales and new orders for February. The Street is projecting month-over-month increases of 3.8 per cent and 5.0 per cent, respectively.

8:30 a.m. ET: Canada’s wholesale trade for February.

8:30 a.m. ET: U.S. import prices for March. Consensus is a rise of 1.7 per cent from February and 3.4 per cent year-over-year.

10 a.m. ET: U.S. NAHB Housing Market Index for April.

2 p.m. ET: U.S. Beige Book is released.

With Reuters and The Canadian Press