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Equities

Canada’s main stock index gained in early going with rising crude prices helping energy stocks. South of the border, the Dow and S&P 500 pulled back slightly after finishing the previous session at record highs.

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At 9:30 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 51.6 points, or 0.27 per cent, at 19,078.39.

In the U.S., the Dow Jones Industrial Average fell 27.2 points, or 0.08 per cent, at the open to 33,500.02. The S&P 500 fell 2.3 points, or 0.06 per cent, at the open to 4,075.57, while the Nasdaq Composite dropped 23.9 points, or 0.17 per cent, to 13,681.671 at the opening bell.

“There seems to have been a delayed reaction to Friday’s impressive non-farm Payrolls,” OANDA senior analyst Jeffrey Halley said.

“The whole buy everything process being given another sugar rush by the US ISM Non-Manufacturing PMI blowing forecasts out of the water. Markit Services PMI had outperformed as it rose to 60.40, but the ISM data stole the show.”

On the corporate side, Swiss lender Credit Suisse said it would take a hit of US$4.7-billion linked to exposure to U.S. hedge fund Archegos Capital. Credit Suisse also announced the departure of two top executives and said it has suspended a share buyback program and cut its dividend.

In this country, the federal Industry committee hearings into the Rogers-Shaw deal continue and is expected to hear from academic researchers and representatives of the Competitive Network Operators of Canada.

Overseas, major European markets were higher in early afternoon trading with the pan-European STOXX 600 rising 0.82 per cent. Britain’s FTSE 100 gained 1.27 per cent. Germany’s DAX and France’s CAC 40 rose 1.15 per cent and 0.54 per cent, respectively.

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In Asia, Japan’s Nikkei lost 1.3 per cent. Markets in Hong Kong were closed for a holiday.

Commodities

Crude prices rebounded from the previous session’s losses as strong economic data helped offset the impact of the prospect of rising output from OPEC and its allies.

The day range on Brent is US$62.08 to US$63.49. The range on West Texas Intermediate is US$58.62 to US$60. Both benchmarks fell by more than 4 per cent on Monday.

Sentiment was helped by a strong reading on U.S. hiring at the end of last week and a report on Monday from the Institute for Supply Management showing activity in the U.S. services industry reached its highest level on record in March.

As well, a private survey early Tuesday indicated that China’s services sector gathered steam in March as firms hired more workers and business optimism surged.

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OANDA’s Jeffrey Halley said markets will also be watching indirect talks between the United States and Iran in Vienna this week as part of broader negotiations to revive the 2015 nuclear deal between Tehran and global powers.

“Perversely, fears that the two sides might find some common ground is weighing on oil prices,” he said.

“An increasing amount of Iranian crude is finding its way to international markets, a significant reason the oil rally has run out of steam. Expect another leg down in oil prices at the first hint of progress.”

Later in the session, investors will also get the first of two weekly U.S. inventory reports with fresh figures from the American Petroleum Institute.

U.S. crude oil inventories were seen falling last week, while distillate and gasoline stocks likely rose slightly, according to a preliminary Reuters poll.

In other commodities, gold prices rose to their highest in more than a week, helped by a softer U.S. dollar.

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Spot gold rose 0.1 per cent to US$1,729.30 an ounce after hitting its highest since March 25 at US$1,738.32. U.S. gold futures gained 0.2 per cent to US$1,731.50.

Currencies

The Canadian dollar was weaker as its U.S. counterpart steadied after the previous session’s decline against world currencies.

The day range on the loonie is 79.65 US cents to 79.89 US cents.

“The CAD has lost a little ground alongside its commodity peers but the backdrop for the CAD — elevated stocks, firmer crude oil — remains constructive in the short run,” Shaun Osborne, chief FX strategist with Scotiabank, says.

There were no major Canadian economic releases scheduled for Tuesday.

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On world markets, the U.S. dollar index sank as low as 92.527 in Asia, its weakest since March 25. That came less than a week after it hit an almost five-month top at 93.439.

The index rose 2.5 per cent in March, its biggest monthly gain since late 2016.

In early London trading, the U.S. dollar rose 0.14 per cent to 92.70. On Monday, it fell 0.43 per cent, its biggest single-day drop since March. 17, according to Reuters.

The euro held around US$1.18.

The Australian dollar, often viewed as a proxy for risk, slipped to US$0.76415, after rallying 0.8 per cent to start the week. The Reserve Bank of Australia left policy unchanged on Tuesday, as expected.

More company news

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Organigram Holdings Inc said on Tuesday it has acquired The Edibles & Infusions Corp (EIC) in a $35-million stock deal, as the cannabis producer looks to tap surging demand for pot-based edibles and soft chews. U.S.-listed shares of Organigram were up 2% at $3.56 in premarket trade, after the Canadian company announced its deal with Vancouver-based pot firm AgraFlora Organics International Inc, which owns 43% of EIC.

France will contribute to a US$4.7-billion recapitalization of Air France-KLM and more than double its stake to nearly 30%, under plans announced on Tuesday with European Union approval. The move is the latest by a major airline group to shore up finances after more than a year of COVID-19 travel shutdowns and deep losses for the sector.

BP said it expects to have hit its $35 billion net debt target in the first quarter of this year, sooner than expected and paving the way for it to deliver on its promise of buying back shares. “This is a result of earlier than anticipated delivery of disposal proceeds combined with very strong business performance during the first quarter,” Chief Executive Bernard Looney said in a statement.

Economic news

(10 a.m. ET) U.S. Job Openings and Labor Turnover Survey for February.

With Reuters and The Canadian Press

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