Equities
Global markets rallied as investors looked forward to interest rate cuts in Europe and possibly Canada later this week, but sticky inflation could make monetary -policy easing a drawn-out process.
As The Globe’s Mark Rendell reports, recent data suggest it’s time for the Bank of Canada to reverse course and start cutting rates before it drives the economy into an unnecessary recession. This Wednesday, the central bank has its first real opportunity since rates started to rise in 2022.
The S&P/TSX Composite Index edged higher at the open, led by gains in materials stocks and ahead of a slew of economic data and the BoC’s interest rate decision. At the bell, the index was up 6.01 points or 0.03 per cent at 22,275.13 before trending lower.
Wall Street also opened higher, lifted by semiconductor and megacap growth stocks ahead of a data-packed week.
The Dow Jones Industrial Average rose 23.67 points or 0.06 per cent at the open to 38,709.99 but then also slid into the red. The S&P 500 advanced 19.64 points or 0.37 per cent at 5,297.15, while the Nasdaq Composite gained 130.69 points or 0.78 per cent to 16,865.70 at the bell.
“The combination of Friday’s soft U.S. inflation data, OPEC’s hint on softer supply policy, the [strong] Chinese PMI figure and the reaction to the Indian election results paint the market in green this Monday,” Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said in a note.
Monday’s analyst upgrades and downgrades
Overseas, the pan-European STOXX 600 was up 0.48 per cent in morning trading. Britain’s FTSE 100 advanced 0.13 per cent, Germany’s DAX rose 0.81 per cent and France’s CAC 40 added 0.41 per cent.
In Asia, Japan’s Nikkei closed 1.13 per cent higher at 38,923.03, while Hong Kong’s Hang Seng gained 1.79 per cent to 18,403.04.
Commodities
Oil prices were little changed as investors digested the complex deal brokered by producer group OPEC+ to extend various layers of output cuts, much of them into 2025.
Brent crude futures for August delivery were down 9 US cents at US$81.02 a barrel, while West Texas Intermediate (WTI) crude futures for July delivery slipped 14 US cents to US$76.85.
In other commodities, gold was up 0.1 at US$2,330 an ounce, having now rallied for four months in a row helped in part by buying from central banks and China.
Currencies and bonds
The Canadian dollar strengthened against the greenback, which held steady after it posted its first monthly decline of 2024 in May.
The day range on the loonie was 73.18 US cents to 73.50 US cents in the early premarket period. The Canadian dollar was up about 0.07 per cent against the greenback over the past month.
The U.S. dollar index, which weighs the greenback against a group of currencies, rose 0.1 per cent to 104.67.
The euro was 0.1 per cent lower at US$1.0841. The British pound fell 0.2 per cent at US$1.2715.
In bonds, the yield on the U.S. 10-year note was down five basis points to 4.47 per cent ahead of the North American opening bell.
Economic news
(9:30 a.m. ET) Canada’s S&P manufacturing PMI for May.
(9:45 a.m. ET) U.S. S&P manufacturing PMI for May.
(10 a.m. ET) U.S. ISM manufacturing PMI for May.
(10 a.m. ET) U.S. construction spending for April. The Street is projecting an increase of 0.2 per cent from March.
Also: Canadian and U.S. auto sales
With Reuters and The Canadian Press