Equity Markets
U.S. stocks opened higher on Monday as a rise in oil prices soothed some nerves following a massive cyber attack that locked up 200,000 computers in more than 150 countries.
The Dow Jones Industrial Average rose59.53 points, or 0.28 per cent, to 20,956.14. The S&P 500 gained 7.15 points, or 0.30 per cent, to 2,398.05. The Nasdaq Composite added 17.60 points, or 0.29 per cent, to 6,138.83.
Canada's main stock index rose as oil and gas stocks, led by Canadian Natural Resources Ltd., spearheaded broad gains across all sectors. All 10 sectors gained, led higher by a 2 per cent rise in energy stocks.
The Toronto Stock Exchange's S&P/TSX composite index gained 86.47 points, or 0.56 percent, to 15,624.35.
Oil prices were up more than 2 per cent after Saudi Arabia and Russia said an output cut would need to be extended through to March next year to curb global crude overhang.
"This has helped oil prices to move higher once more, but the cartel appears to get diminishing returns each time it announces a reduction in output," IG's Chris Beauchamp said in a note. "They will need to go big on the cuts theme at their May meeting in Vienna, to avoid a sense of disappointment creeping in."
Overseas, world markets were mixed. A win by Angela Merkel's conservatives in a regional election in German also helped bolster market sentiment in Europe. London's blue-chip FTSE 100 was up about 0.11 per cent. Paris' CAC 40 was off 0.15 per cent and German's DAX slipped 0.18 per cent.
In Asia, markets mostly shrugged off worries over the 'ransomware' cyberattack to reach a two-year high. Tokyo's Nikkei lost 0.07 per cent, pressured by a stronger yen. Hong Kong's Hang Seng gained 0.86 per cent, and the Shanghai composite 0.22 per cent.
Commodities
Oil prices jumped more than 2 per cent on backing from Saudi Arabia and Russia to extend a supply cut through to early 2018. Energy ministers in those two countries said Monday that cuts should be extended by nine months, until March 2018. Brent crude moved above $52 a barrel on the news. U.S. West Texas Intermediate also spiked on the latest developments.
"There has been a marked reduction to the inventories, but we're not where we want to be in reaching the five-year average," Saudi Energy Minister Khalid al-Falih told a briefing in Beijing alongside his Russian counterpart Alexander Novak, according to a Reuters report. "We've come to the conclusion that the agreement needs to be extended."
Oil prices have been held in check by ongoing concerns about rising inventories in the United States. U.S. energy firms added oil rigs for a 17th week in a row, extending a 12-month drilling recovery, energy services firm Baker Hughes Inc said on Friday. OPEC, Russia and other producers originally pledged to cut output by 1.8 million barrels per day in the first half of 2017, with a possible six-month extension. OPEC and non-OPEC producers are set to meet May 25 in Vienna.
Despite Monday's price jump, LCG senior market analyst Ipek Ozkardeskaya noted that WTI crude net future positions continue to fall, suggesting continuing concern about the market down the road.
"To us, the real challenge will the path to $53-55 (a barrel) zone," she said. "Provided that the OPEC's comments did little to reverse the winding trend in the futures markets, the extension of OPEC's production cuts per se may not be sufficient. "
Elsewhere, gold prices edged higher as a weekend missile test by North Korea renewed geopolitical concerns and pressured the U.S. dollar. Spot prices and gold futures were both higher early on.
Silver prices also advanced. Copper prices were higher on the London Metal Exchange early on.
Currencies and bonds
The Canadian dollar jumped to its highest level in two weeks on oil's gains. The gains also helped the Australian dollar, which managed a 10-day high, and the New Zealand dollar, which was up nearly 1 per cent. So far, the day's range for the Canadian dollar was 72.87 cents (U.S.) to 73.44 cents. The loonie closed Friday at 72.92 cents. Trade tensions, growing interest rate spreads and a frothy housing market have all hampered the loonie's progress in recent weeks. Analysts were cautious about the lasting impact of Monday's resource news.
"While we remain skeptical about the success of such bilateral deals to reduce the oil supply glut ─ increased production by the U.S., Canada and Iran among others will compensate ─ we welcome the temporary floor that the announcement has put under the loonie," National Bank Financial's Krishen Rangasamy said in a note.
The U.S. dollar started the week lower on disappointing economic news out of the United States last week. Both retail sales and inflation figures fell short of analysts' forecasts, raising worries about the retail sector and the strength of the wider U.S. economy. The U.S. dollar index, which tracks the greenback against a basket of six major currencies, was off about 0.2 per cent early on. The dollar had also started out lower against the yen on Monday but later reversed the trend and moved higher against the Japanese currency. The euro was also up slightly against the greenback.
In bonds, German bonds had a slight edge over euro zone peers on Monday after Chancellor Angela Merkel's conservatives defeated the ruling Social Democrats in a key state election, lifting their hopes of retaining power in September's national vote. Most euro zone government bond yields rose 2-3 basis points as a 2-per-cent jump in oil prices stoked inflation expectations.
Stocks set to see action
Breaking his silence on Home Capital, Bank of Canada Governor Stephen Poloz said the mortgage lender's problems are contained but the sharp rise in house prices and their potential effects on the financial system have emerged as a primary concern. In a weekend interview on the sidelines of the Group of Seven meeting of finance ministers and central bankers in Bari, Italy, Mr. Poloz said the Bank of Canada sees no signs that Home Capital's rapid deterioration has triggered contagion, The Globe's Eric Reguly reported.
B.C. billionaire Jim Pattison has acquired a 10.1-per-cent stake in Canada's largest lumber producer, West Fraser Timber Co. Ltd., raising speculation about a potential merger with Canfor Corp. The 88-year-old businessman is the biggest shareholder in the country's second-largest lumber producer, Canfor, in which he holds a 47.8-per-cent stake.
Lululemon Athletica Inc. has kicked off its first-ever global advertising campaign.
A South African court decision, allowing the seizure of a cargo ship with 50,000 tonnes of phosphate, could open the door to renewed challenges of Canadian imports from a disputed territory in the deserts of North Africa, The Globe's Geoffrey York reports. Two Canadian companies, Potash Corp. and Agrium Inc., last year accounted for nearly half of all exports of phosphate from Western Sahara, a territory claimed by Morocco since 1975. Those shipments could face new scrutiny and more intense legal challenges as a result of the South African court decision. The court case in South Africa is believed to be the first time a national independence movement has won a legal action to intercept the export of state property. Potash's shares in New York rose 1.7 per cent in premarket trading while Agrium's shares were unchanged.
JPMorgan Chase has agreed to buy a Dublin building with room for 1,000 staff in the first sign of a financial services company expanding significantly in Ireland since the government began a major campaign to attract firms in the wake of Brexit. The U.S. investment bank will acquire a 130,000 square foot (12,000 square meter) building at the Capital Dock development in Dublin's docklands, the building's developer Kennedy Wilson said in a statement. The bank, which currently employs around 500 people in Dublin, did not say how many jobs would be created or whether any positions would be moved from the United Kingdom. Its shares were flat in premarket trading.
Thermo Fisher Scientific Inc., the world's No. 1 maker of scientific instruments, said on Monday it would buy Dutch drug ingredients maker Patheon NV as it looks to become a one-stop shop for contract drug development and manufacturing. Thermo Fisher's shares were unchanged in premarket trading but Patheon's jumped 33.6 per cent on the news.
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Economic News
The Canadian Real Estate Association said national home sales fell 1.7 per cent in April from the month before. The number of new homes listed fell 10 per cent month-to-month. The national average sale price rose 10.4 per cent from the same month a year earlier.
Manufacturing in New York state shrank for the first time in seven months in May, as new orders fell and shipments grew more slowly. The Federal Reserve Bank of New York says its Empire State manufacturing index fell last month to minus 1, from 5.2 in April. Any reading below zero signals contraction.
China's factory output and fixed asset investment growth cooled more than expected in April, adding to signs that momentum in the world's second-biggest economy is slowing from a strong start in the first quarter. Factory output rose 6.5 per cent in April from a year earlier, while fixed-asset investment grew 8.9 per cent in the first four months of the year, both worse than expectations.
With files from Reuters and The Associated Press