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Canada’s main stock index rose at the beginning of trading on Monday after a difficult week, supported by the strength of financial stocks. Markets south of the border were closed for the holiday.
At 9:34 a.m. ET, the Toronto Stock Exchange’s composite index S & P / TSX rose 69.88 points, or 0.37 percent, to 19,000.36.
“After such a tumultuous week last week, a corrective rebound from the stock markets cannot be ruled out this week,” OANDA senior analyst Jeffrey Halle said in a note.
“However, this may have to wait another 24 hours, as markets in the United States are closed today. With nothing on the calendar to mark today, European markets can take comfort in lower energy and raw material prices, although Europe’s natural gas supplies are narrower than ever as Russian flows decline.
In Canada, the key economic announcement for the week comes on Wednesday with new data on inflation from Statistics Canada.
Bank of Montreal chief economist Douglas Porter says the May report could be “potentially even more shocking than the US version a week ago.” He said BMO is looking for a 12 percent rise in gasoline prices to raise the monthly consumer price index above 1 percent. This will raise core inflation to 7.4% on an annual basis from 6.8% last month, Mr Porter said.
“The risks seem to be distorted upwards on this call,” Mr Porter said.
“In this case, we suspect that this will be enough to persuade the Bank of Canada to unleash an ‘extremely unusual’ increase in interest rates by 75 basis points next month,” he said. “Like the Fed, we also raised our demand for the BoC interest rate endpoint by a quarter to 3.25 percent, leading to a cumulative expected tightening to 300 basis points.
On the corporate side, Andrew Willis and Alexandra Posadzki of The Globe report that Rogers Communications Inc. intends to take 450,000 new mobile phone customers as part of its agreement to sell wireless operator Freedom Mobile to Quebecor Inc. for $ 2.85 billion, a deal that marks a crucial step in Rodgers’ campaign to obtain regulatory approval for the takeover of Shaw Communications Inc. Late Friday, Rodgers announced plans to sell Freedom Mobile to Shaw, Canada’s fourth-largest wireless carrier with 1.7 million customers, in Quebec.
Overseas, the pan-European STOXX 600 rose 0.67% by the afternoon. The British FTSE 100 rose 1.53%. The German DAX added 0.56%, while the French CAC 40 increased by 0.15%.
In Asia, Japan’s Nikkei fell 0.74%. Hong Kong’s Hang Seng rose 0.42%.
Goods
Crude oil prices stabilized early Monday after a volatile night session, with economic concerns continuing to weigh on sentiment as tighter supplies offered some support.
Brent’s daily range is $ 111.52 to $ 114.38. The West Texas Intermediate range is US $ 108.72 to US $ 110.95. Both benchmarks declined sharply last week.
“There are a lot of headaches, especially with the large-scale drop in crude oil on Friday, with people clutching straws to explain what initially seemed like an irrational move, as the huge drop was undoubtedly outside the realm of demand and recession.” which fills new drums all week, “said in a note Stephen Ines, managing partner of SPI Asset Management.
“However, oil markets are not immune to the constant blows of recession and the destruction of demand.
Reuters, meanwhile, said oil production in Libya remained volatile following blockades by groups in the east.
Libyan Oil Minister Mohamed Un told Reuters on Monday that the country’s total production is about 700,000 barrels per day (bpd). Libya’s production has fallen to 100,000 to 150,000 barrels a day, a spokesman for the oil ministry said last week.
Gold prices, meanwhile, rose moderately in an uneven session, aided by the weaker US dollar.
Spot gold rose 0.1% to $ 1,841.59 an ounce until early Monday morning, after falling as much as 0.3% earlier in the session. US gold futures rose 0.2% to $ 1,843.40.
Currencies
The Canadian dollar was more stable, trading around 77 US cents, while its counterpart in the US retreated against a group of world currencies, but still remained close to the highest values of two decades.
The daily range of loonie is 76.67 US cents to 77.01 US cents.
“CAD has strengthened moderately in silent trading as the broader risk sentiment stabilizes despite a sharp drop in crypto over the weekend,” Sean Osbourne, chief currency strategist at Scotiabank, said in a note.
We mention this only in the context of general risk sentiment and wonder if the constant pressure of bitcoins below $ 20,000 could affect the wider market, given that institutional investors are late in the crypto party and many they are probably exposed to significantly higher values. prices. ”
There were no major Canadian economic publications on Monday’s calendar. Investors are now expecting a report on inflation on Wednesday.
On world markets, the US dollar fell 0.25% to 104.44, but remained close to a two-decade high of 105.79, reached on Wednesday last week, according to Reuters.
The euro rose 0.2% against the US dollar to $ 1.05155 even after French President Emmanuel Macron lost an absolute majority in the country’s parliamentary elections.
The US dollar fell 0.2% to 134.715 yen after reaching 135.44 yen in Asia-Pacific trading hours, close to Wednesday’s peak of 135.60, the highest level since October 1998, according to Reuters. .
More company news
Nicholas Van Praet of the Globe reports that workers in signals and communications have gone on strike Canadian National Railway Company in a development that threatens to exacerbate transport difficulties across the country in the midst of the COVID-19 pandemic. About 750 members of the International Brotherhood of Electrical Engineers in Canada left their jobs on Saturday after failing to agree to a new employment contract with the railroad, union negotiator Steve Martin said in an interview. The two sides are not meeting in person, but continue to talk and exchange proposals for agreements, he said.
Economic news
Germany PPI
US markets close (June 10)
With Reuters and the Canadian press
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