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Equities

Canada’s main stock index gained in early trading Monday after a rough week, helped by strength in financial stocks. Markets south of the border were closed for a holiday.

At 9:34 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 69.88 points, or 0.37 per cent, at 19,000.36.

“After such a torrid week last week, a corrective bounce by equity markets cannot be ruled out this week,” OANDA senior analyst Jeffrey Halley said in a note.

“However, that may have to wait for another 24 hours as U.S. markets are closed today. With nothing on the calendar of note today, European markets may take some solace from lower energy and commodity prices, although European natural gas supplies are tighter than ever as Russian flows reduce.”

In Canada, the week’s key economic release comes Wednesday with fresh inflation figures from Statistics Canada.

Bank of Montreal chief economist Douglas Porter says the May report could prove “potentially even more shocking than the U.S. version a week ago.” He said BMO is looking for a 12 per-cent-rise in gasoline prices to drive the monthly consumer price index up above 1 per cent. That would lift headline inflation to 7.4 per cent at an annual rate, from 6.8 per cent the month before, Mr. Porter said.

“The risks seem skewed to the upside on that call,” Mr. Porter said.

“In the event, we suspect that this will be enough to convince the Bank of Canada to also unleash a ‘highly unusual’ 75 bp rate hike next month,” he said. “Like the Fed, we have also bumped up our call on the end point for BoC rates by a quarter to 3.25 per cent, bringing the cumulative expected tightening to 300 basis points.”

On the corporate side, The Globe’s Andrew Willis and Alexandra Posadzki report that Rogers Communications Inc. stands to pick up 450,000 new cellphone clients as part of its agreement to sell wireless carrier Freedom Mobile to Quebecor Inc. for $2.85-billion, a deal that marks a crucial step in Rogers’ campaign to win regulatory approval of its takeover of Shaw Communications Inc. Late on Friday, Rogers announced plans to sell Shaw’s Freedom Mobile division – Canada’s fourth-largest wireless carrier, with 1.7 million customers – to Quebecor.

Overseas, the pan-European STOXX 600 rose 0.67 per cent by afternoon. Britain’s FTSE 100 advanced 1.53 per cent. Germany’s DAX added 0.56 per cent while France’s CAC 40 edged up 0.15 per cent.

In Asia, Japan’s Nikkei fell 0.74 per cent. Hong Kong’s Hang Seng rose 0.42 per cent.

Commodities

Crude prices steadied early Monday after a choppy overnight session with economic concerns continuing to weigh on sentiment while tighter supply offered some support.

The day range on Brent is US$111.52 to US$114.38. The range on West Texas Intermediate is US$108.72 to US$110.95. Both benchmarks saw sharp declines last week.

“There is a ton of head-scratching, especially concerning Friday’s massive downward crude oil move, with people grasping at straws to explain what at first appeared to be an irrational move, as the vast drop was undoubtedly out of the sphere of the demand and recession narrative that has been filling new reels all week long,” Stephen Innes, managing partner with SPI Asset Management, said in a note.

“Still, Oil markets are not immune to the constant recessionary and demand destruction drumbeats.”

Meanwhile, Reuters reports that Libya’s oil production has remained volatile following blockades by groups in the country’s east.

The Libyan Oil Minister Mohamed Oun told Reuters on Monday that the country’s total production is at about 700,000 barrels per day (bpd). Libya’s output had fallen to 100,000 to 150,000 bpd, a spokesman for the oil ministry said last week.

Gold prices, meanwhile, were up modestly in an uneven session, helped by a weaker U.S. dollar.

Spot gold rose 0.1 per cent to US$1,841.59 per ounce by early Monday morning, after falling as much as 0.3 per cent earlier in the session. U.S. gold futures gained 0.2 per cent to US$1,843.40.

Currencies

The Canadian dollar was firmer, trading around 77 US cents, while its U.S. counterpart pulled back against a group of world currencies but still held not far from two-decade highs.

The day range on the loonie is 76.67 US cents to 77.01 US cents.

“The CAD has firmed modestly in quiet trade as the broader risk mood steadies, despite the sharp drop in crypto over the weekend,” Shaun Osborne, chief FX strategist with Scotiabank, said in a note.

“We mention this only in the context of overall risk sentiment and do wonder whether a persistent bitcoin push under $20,000 could impact the broader market, given that institutional investors were late-comers to the crypto “party” and are very likely exposed at significantly higher prices.”

There were no major Canadian economic releases on Monday’s calendar. Investors are now awaiting Wednesday’s inflation report.

On world markets, the U.S. dollar index fell 0.25 per cent to 104.44 but remained close to a two-decade high of 105.79 hit on Wednesday last week, according to figures from Reuters.

The euro rose 0.2 per cent against the U.S. dollar to US$1.05155 even after French President Emmanuel Macron lost an absolute majority in the country’s parliamentary election.

The U.S. dollar slid 0.2-per-cent lower to 134.715 yen, after hitting 135.44 yen in Asia-Pacific trading hours, close to Wednesday’s peak of 135.60, the highest since October 1998, according to Reuters.

More company news

The Globe’s Nicolas Van Praet reports that workers in signals and communications have gone on strike at Canadian National Railway Co. in a development that threatens to exacerbate transport bottlenecks across the country in the midst of the COVID-19 pandemic. Some 750 members of the International Brotherhood of Electrical Workers in Canada walked off the job Saturday after failing to agree to a new labour contract with the railway, union negotiator Steve Martin said in an interview. The two sides are not meeting in person but continue to talk and exchange contract proposals, he said.

Economic news

Germany PPI

U.S. markets close (Juneteenth)

With Reuters and The Canadian Press