Global markets were on edge after concerns about the Iran war and inflation pain had triggered ​the sharpest selloff in U.S. Treasuries and other benchmark government bonds since ‌last year’s Liberation Day turmoil.

Traders also eyed what could be a tense meeting between U.S. President Donald Trump and Chinese counterpart Xi Jinping in Washington later.

Wall Street futures were in the red after major North American markets closed down yesterday.

TSX futures followed sentiment lower ahead of the latest retail sales data.

In Canada, investors are getting results from BlackBerry Ltd.

On Wall Street, markets are watching earnings from Costco Wholesale Corp.

“Inflation is high, central bankers are giving hawkish messages, there’s competition from the funding needs of the tech sector and there are no reassuring signs on the U.S. debt trajectory,” AXA’s ​Chief Economist Gilles Moec said.

“They are all fairly big macro issues and on top of that you have the binary geopolitical issue of what is happening in the Middle East.”

Overseas, the pan-European STOXX 600 was down 0.34 per cent in morning trading. Britain’s FTSE 100 rose 0.16, Germany’s DAX dropped 0.47 per cent and France’s CAC 40 fell 0.48 per cent.

In Asia, Japan’s Nikkei returned from a holiday break, closing 0.76 per cent higher. Hong Kong’s Hang Seng slid 0.29 per cent.

Oil prices were on the rise as ​diplomatic talks between the U.S. and Iran ‌showed little sign of progress, while investors focused on uncertainty about a potential US ban on diesel exports.

Brent crude futures were up 2.5 per cent to US$105.60 a barrel. West Texas Intermediate (WTI) futures gained 1.9 per cent to US$93.89 a barrel.

“Brent retains a larger geopolitical ​and sea-route premium because international crude is more ⁠directly exposed to Middle East and Hormuz disruption, while WTI ⁠benefits more from relatively insulated U.S. supply,” said ‌Priyanka Sachdeva, head of market insights at Phillip Nova.

In other commodities, spot gold fell 0.5 per cent to US$4,265.89 an ounce. ⁠U,.S. gold ​futures for December delivery declined 0.4 per cent to US$4,300.20.

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

The day range on the loonie was 70.84 US cents to 70.97 US cents in early trading. The Canadian dollar was down about 1.79 per cent against the greenback over the past month. It traded at $1.4108 per US$1.

The U.S. dollar index, which weighs the greenback against a group of currencies, rose 0.11 per cent to 101.21.

The euro slid 0.12 per cent to US$1.1372. The British pound declined 0.11 per cent to US$1.3227.

In bonds, the yield on the U.S. 10-year note was last up at 5.139 per cent.

8:30 a.m. ET: Canada’s Survey of Employment, Payrolls and Hours for July.

8:30 a.m. ET: Canadian retail sales for July. The Street expects a month-over-month decline of 0.8 per cent.

8:30 a.m. ET: Canada’s manufacturing sales for August.

8:30 a.m. ET: U.S. initial jobless claims for week of Sept. 19. Estimate is 203,000, up 7,000 from the previous week.

8:30 a.m. ET: U.S. current account balance for Q2.

10:00 a.m. ET: U.S. new home sales for August.

Also: Summit between Chinese President Xi & U.S. President Trump (in Washington)

With Reuters and The Canadian Press