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Equity Markets

Canada's main stock index opened higher on Monday, helped in part by advances in financial and energy stocks, but gains were offset by a firm retreat in the materials group as gold prices fell.

The Toronto Stock Exchange's S&P/TSX composite index rose 17.07 points, or 0.11 percent, to 15,336.63 shortly after the open.

Of the index's 10 main groups, nine were in positive territory.

U.S. stocks opened higher on Monday as technology stocks rose and oil prices climbed from last week's seven-month lows.

The Dow Jones Industrial Average rose 59.79 points, or 0.28 percent, to 21,454.55. The S&P 500 gained 7.35 points, or 0.30 percent, to 2,445.65. The Nasdaq Composite added 27.02 points, or 0.43 percent, to 6,292.27.

U.S. stocks ended higher on Friday after a last-minute trading spike, helped by gains in technology sector, which offset weakness in financial stocks, sending the Nasdaq higher and giving it a weekly gain for the first time in three weeks.

Fed Chair Janet Yellen speaks on London on Tuesday and investors will look for any clues to the rate outlook, after mixed views from other Fed officials in recent days.

Shares rose in Europe on Monday, with Italian banks gaining after a deal to wind up two failed regional lenders

The-pan-European STOXX 600 share index rose 0.6 per cent, led higher by banks, after the agreement under which Italy's largest retail bank, Intesa Sanpaolo will take on the remaining good assets of collapsed Popolare di Vicenza and Veneto Banca.

Nestle climbed to a new record after an activist investor urged changes at the consumer bellwether. It was up 4.3 per cent in trading in Europe. Activist investor Daniel Loeb's Third Point unveiled a stake of more than 1 percent, urging the group to improve its margins, buy back stock and sell its stake in L'Oreal.

British shares rose on Monday, snapping four straight days of losses, as banks joined a broader European rally and a bounce in crude oil prices which buoyed energy firms. The blue chip FTSE index added 0.5 percent. Germany's Dax was up 0.8 per cent and France's CAC 40 gained 1.01 per cent.

MSCI's broadest index of Asia-Pacific shares outside Japan ticked up 0.6 per cent as tech led gains. Trading was slow with many markets in the region closed for holidays to celebrate the end of Ramadan. Japan's Nikkei rose 0.1 per cent. The Shanghai index was up 0.9 per cent and the Hang Seng gained 0.8 per cent.

In Japan, airbag maker Takata filed for bankruptcy protection in the United States and Japan, and said it would be bought for $1.6-billion by U.S.-based Key Safety Systems. In the biggest bankruptcy of a Japanese manufacturer, Takata faces tens of billions of dollars in costs and liabilities resulting from almost a decade of recalls and lawsuits. Its airbags have been linked to at least 17 deaths around the world.

Mainland Chinese shares rallied, with the CSI300 index rising 1.2 per cent to hit its highest level in almost 18 months, after MSCI said the index provider could raise its weighting of China's mainland-listed 'A' shares.

Commodities

A major cause of lower inflation globally has been a fall in oil prices in recent weeks on signs an agreement by producers in the Organization of the Petroleum Exporting Countries is failing to curb a global glut of crude.

Brent crude, the international benchmark, rose 59 cents or 1.3 per cent to $46.13, buoyed by the weaker dollar. Oil prices are down around 13 per cent since late May.

Dollar weakness also lifted copper. The industrial metal rose 0.4 per cent to $5,823 a tonne, just shy of its highest since early April.

Gold tumbled to its lowest price in nearly six weeks as a large sell order and a stronger dollar hit sentiment on Monday, though losses were limited by political uncertainty around the world.

Spot gold was down 1.2 percent at $1,241 an ounce, having dropped as far as $1,236.46, its lowest since May 17. U.S. gold futures slid by 1.1 percent to $1,242.30.

The sale of 18,500 lots of gold, totalling 1.85 million ounces, and 5,000 ounces of silver in 5,500 lots on Comex in a short space of time was behind falling prices, said Afshin Nabavi, head of trading at MKS in Switzerland.

"Clearly somebody sold it by mistake and bought it back quickly, triggering stops below $1,250," said MKS trader Bernard Sin.

"Fundamentally, there is still a lot of uncertainty in the world, with Italian bank bailouts, Trump's policies and Brexit. The world is in geopolitical chaos and gold is still good insurance."

Copper firmed on Monday, rising back towards the previous session's 11-week high as expectations for upbeat Chinese demand this year and concerns over mine supply lent support. London Metal Exchange copper was at $5,807.50 a tonne, up 0.1 percent, after a 1 percent gain in the previous session. LME copper touched its highest since April 7 on Friday at $5,854.50.

Other base metals also rose, with lead reaching a near eight-week high and zinc holding near Friday's 11-week peak as on-warrant London Metal Exchange stocks - metal not earmarked for delivery, and therefore available to the market - fell to their lowest in nearly a decade.

LME zinc was at $2,727 a tonne, up 0.9 percent but off Friday's peak of $2,747, its highest since April 7. Lead was up 0.8 percent at $2,247 a tonne, having earlier hit its highest since May 3 at $2,248.50 a tonne.

Currencies and bonds

The U.S. dollar and U.S. bond yields held close to recent lows as subdued inflation raised questions over the outlook for monetary policy. The Canadian dollar edged higher while Canadian 10 year bonds edged up 0.04 to 1.47.

Financial investors' lack of faith in another rise in U.S. interest rates this year kept the dollar near one-week lows on Monday at the start of a week packed with speeches from Federal Reserve and other senior central bank officials. Markets so far are loathe to buy the Fed's own line that it will raise U.S. rates once more before the end of 2017 and another three times next year. Even with a blip higher in morning trade, 5- and 10-year Treasury yields are up to 45 basis points below highs hit in March.

The dollar traded 0.15 percent stronger at $1.1176 per euro and a third of a percent higher at 111.72 yen.

The U.S. Federal Reserve is gradually tightening its policy, but investors think the pace of its tightening will be much slower than policymakers want, given subdued U.S. inflation.

Money market futures price in only about 50 percent chance of another rate hike by the end of the year, compared to Fed's own projection of one more rate increase.

That hardly changed after San Francisco Fed President John Williams said the U.S. central bank needs to keep raising rates gradually with the U.S. economy at full employment and inflation set to hit the Fed's two-percent target next year.

U.S. 30-year Treasury bond yields fell Monday to 2.70 per cent, the lowest level since Nov. 9.

The 10-year U.S. Treasuries yield stood at 2.153 percent, not far from seven-month low of 2.103 percent hit mid-June, after news that inflation had undershot expectations for a third straight month.

Stocks set to see action

Investors are still closely watching Whole Foods' stock amid speculation about a competing bid to Amazon's $13.7-billion deal. Whole Foods' stock fell 0.5 per cent while Amazon stock rose 0.55 per cent.

Shares of Portola Pharmaceuticals were up 4 percent  in premarket trading, after the FDA, on Friday, approved a new oral blood-thinner made by the company.

Micron was up 1.5 percent after Cowen & Co increased its price target on the chipmaker's stock.

In Japan, airbag maker Takata filed for bankruptcy protection in the United States and Japan, and said it would be bought for $1.6-billion by U.S.-based Key Safety Systems. In the biggest bankruptcy of a Japanese manufacturer, Takata faces tens of billions of dollars in costs and liabilities resulting from almost a decade of recalls and lawsuits. Its airbags have been linked to at least 17 deaths around the world.

Building materials supplier Martin Marietta Materials Inc. agreed to buy privately held Bluegrass Materials Co. for about $1.63-billion in cash to expand into mid-Atlantic region. Bluegrass Materials, which makes aggregates and concrete blocks, operates 23 sites across Georgia, South Carolina, Maryland, Kentucky and Tennessee.

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Economic News

Demand for long-lasting U.S. factory goods fell by the most in 18 months, and a key category that tracks business investment also slipped, evidence that manufacturing output is barely growing.

The Commerce Department says orders for durable goods — items meant to last at least three years — slid 1.1 per cent in May. It was the second straight decline. The Street expects a decline of 0.6 per cent from April. Excluding transport, the projection is a rise of 0.3 per cent.

U.S. manufacturing has struggled to gain its footing this year. A plunge in demand for civilian and military aircraft drove the decline in May. Excluding transportation goods, orders actually ticked up 0.1 per cent, after dropping the previous month.

There were some other positive signs in the report: Orders for new cars rose for the second straight month. Orders also increased for industrial machinery, steel and other metals, and appliances.

(8:30 a.m. ET) U.S. Chicago Fed National Activity Index.

(10:30 a.m. ET) U.S. Dallas Fed Manufacturing Activity.

With files from Reuters and Bloomberg