Equities
Canada’s main stock index opened up Monday with energy and materials shares offering support. On Wall Street, key indexes also advanced in early trading as investors await key economics and earnings reports later in the week.
At 09:34 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 91.44 points, or 0.45 per cent, at 20,610.81.
The Dow Jones Industrial Average rose 6.68 points, or 0.02 per cent, at the open to 35,465.97.
The S&P 500 opened higher by 2.59 points, or 0.06 per cent, at 4,584.82, while the Nasdaq Composite gained 21.24 points, or 0.15 per cent, to 14,337.90 at the opening bell. All three U.S. indexes were positive for the month heading into Monday’s session.
This week, the familiar themes of earnings and economics will dominate again. The week’s key economic reports for both Canadian and U.S. investors will come on Friday with the release of jobs numbers for July.
“With inflation steadily cooling, the Fed’s historic tightening campaign appears to be ending. The focus on Wall Street won’t just be inflation but now also economic activity,” OANDA senior analyst Craig Erlam said.
“Friday is all about the July [U.S.] nonfarm payroll report, which should show hiring eased from 209,000 to 185,000. The unemployment rate is expected to remain steady at 3.6 per cent, while average hourly earnings on a monthly basis tick lower to a 0.3 per cent pace,” he said.
In Canada, Alvin Tan, Asia FX strategist with RBC, says that bank’s economists are expecting to see the addition of 25,000 new jobs in July following June’s solid 60,000 increase.
“Still, surging population growth means that won’t be enough to absorb all new labour market entrants,” he said.
“The unemployment rate edged up 0.2 percentage points in each of May and June, and we look for another tick higher in July (from 5.4% to 5.5%).”
On the earnings front, Wall Street will get results from a swath of big corporate names, notably tech giants Apple and Amazon on Thursday. In Canada, results are due from Shopify after the closing bell on Wednesday. BCE reports Thursday morning and Enbridge will release results on Friday.
In Europe, the pan-European STOXX 600 was up 0.21 per cent by midday. New figures released Monday morning showed the annual rate of inflation in the euro zone eased to 5.3 per cent in July from 5.5 per cent in June.
Britain’s FTSE 100 added 0.10 per cent. Germany’s DAX and France’s CAC 40 rose 0.25 per cent and 0.54 per cent, respectively.
In Asia, Japan’s Nikkei finished up 1.26 per cent. Hong Kong’s Hang Seng gained 0.82 per cent.
Commodities
Crude prices were steady and looked set for their best monthly showing in more than a year as markets anticipate an extension of Saudi Arabia’s voluntary production cuts into September.
The day range on Brent was US$84.40 to US$85.06 in the early premarket period. The range on West Texas Intermediate was US$80.13 to US$80.79.
Both benchmarks managed their best levels since this spring on Friday and recorded a fifth week of gains. Both are set to finish July with their biggest monthly advance since early 2022.
Sentiment was helped Monday by expectations that Saudi Arabia will continue to curb output.
Reuters reports that Saudi Arabia is expected to extend a voluntary oil output cut of 1 million barrels per day (bpd) for another month to include September, tightening supply.
Gold prices, meanwhile, were headed for their biggest monthly gain in four amid expectations global central banks could be near the end of their rate-hike cycles.
Spot gold was down 0.2 per cent at US$1,954.99 per ounce by early Monday morning. U.S. gold futures slipped 0.3 per cent to US$1,953.90 per ounce. Gold is on track for a 1.8-per-cent gain for the month, the best showing since March, according to figures from Reuters.
Currencies
The Canadian dollar was higher in early trading while its U.S. counterpart was little changed and looked set for a second month of declines against a group of world currencies.
The day range on the loonie was 75.39 US cents to 75.61 US cents in the early premarket period. The Canadian dollar was up 0.11 per cent against the greenback for the month as of early Monday morning. The loonie is up more than 2 per cent for the year-to-date.
On world markets, the U.S. dollar index, which weighs the greenback against a basket of currencies, was steady at 101.69, but was off by about 1 per cent for July marking a second consecutive month of declines, according to figures from Reuters.
The euro rose 0.1 per cent to US$1.1029 early Monday morning.
Britain’s pound gained 0.13 per cent to US$1.2850 ahead of the Bank of England’s policy meeting later in the week.
The yield on the U.S. 10-year note was slightly higher at 3.981 per cent in the predawn period.
More company news
Canadian miner Pan American Silver Corp said on Monday it plans to sell its 56-per-cent stake in the Minera Agua Rica Alumbrera copper project in Argentina to Swiss commodities giant Glencore for US$475-million. The MARA project in Argentina’s Catamarca province was established in December 2020 following the integration of the Minera Alumbrera plant and mining infrastructure with the Agua Rica deposit, according to Pan American’s website. The asset has proven and probable mineral reserves of 5.4 million tonnes of copper and 7.4 million ounces of gold, with an initial mine life of 28 years. -Reuters
Economic news
Euro area releases real GDP for second quarter, plus July consumer price indexes.
With Reuters and The Canadian Press