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Equities

Canada’s main stock index started lower at Monday’s open with energy and mining shares weighing while investors await the Bank of Canada’s business outlook survey later in the morning.

U.S. markets are closed Monday for Martin Luther King Jr. Day.

At 9:30 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was down 29.37 points, or 0.14 per cent, at 20,330.73.

On Monday morning, the Bank of Canada delivers its twin surveys on business outlook and consumer expectations. The report comes ahead of Tuesday’s key reading on December inflation in Canada and the central bank’s next interest rate decision, which is due Jan. 25.

“RBC Economics expects today’s BoC’s Q4 business outlook survey to show an ongoing deterioration in the future sales outlook,” Alvin Tan, Asia FX strategist with RBC, said in an early note.

“This would be consistent with softer business sentiment in manufacturing PMI data. The BoC will be watching longer-run business inflation expectations and wage plans. Comments on businesses’ price-setting behaviour will also be closely scrutinized after the Q3 release flagged more businesses resorting to more frequent price raises.”

The two Bank of Canada reports are due at 10:30 a.m. ET.

Monday's analyst upgrades and downgrades

Ahead of that, Canadian investors got a reading on Canada’s housing market with the release of December home sale figures from the Canadian Real Estate Association.

CREA said sales were up 1.3 per cent month-over-month in December but down 39.1 per cent from levels seen a year earlier.

The MLS Home Price Index declined by 1.6 per cent month-over-month and was down 7.5 per cent year-over-year, the association said.

Overseas, the pan-European STOXX 600 was up 0.23 per cent by midday. Britain’s FTSE 100 gained 0.12 per cent. Germany’s DAX added 0.21 per cent while France’s CAC 40 was up 0.16 per cent.

In Asia, Japan’s Nikkei finished down 1.14 per cent. Hong Kong’s Hang Seng added 0.04 per cent.

Commodities

Crude prices dipped early Monday but still held most of last week’s strong gain as the reopening in China fuels optimism over future demand.

The day range on Brent is US$84.05 to US$85.59 in early trading. The range on West Texas Intermediate was US$78.79 to US$80.22. Trading remained thin with U.S. markets closed for the day.

Last week, both benchmarks spiked 8 per cent, for the best weekly showing since last fall.

“The fact remains that the first half of the year, at least, will be enormously challenging for the global economy but lower terminal rates and even cuts later in the year will cushion the blow and could see it outperform current expectations,” OANDA senior analyst Craig Erlam said in a recent note.

“That, along with the resurgence in China, will be a big plus for crude demand and could keep the price well supported.”

In other commodities, gold prices slipped as the U.S. dollar firmed.

Spot gold dipped 0.3 per cent to US$1,914.04 per ounce, as of early Monday morning, after hitting its highest since late April at US$1,929 per ounce earlier in the session.

U.S. gold futures fell 0.3 per cent to US$1,915.80.

Currencies

The Canadian dollar was little changed while its U.S. counterpart steadied after touching a seven-month low against a group of currencies.

The day range on the Canadian dollar was 74.51 US cents to 74.90 US cents.

Canadian investors get the Bank of Canada business outlook and consumer expectation surveys this morning followed by fresh inflation figures tomorrow morning.

On world markets, the U.S. dollar index, which weighs the greenback against a group of currencies, hit a seven-month low of 101.77 in Asian trading, extending its selloff from last week after data showed that U.S consumer prices fell for the first time in more than 2-1/2 years in December, Reuters reported.

The euro touched a new nine-month high of US$1.0874 in early trading before pulling back to US$1.0861, while the Australian dollar breached the key US$0.7000 level for the first time since August, before dipping back to US$0.6959, the news agency said.

Economic news

(8:30 a.m. ET) Canadian manufacturing sales and new orders for November.

(8:30 a.m. ET) Canadian construction investment for November.

(9 a.m. ET) Canada’s existing home sales and average prices for December.

(9 a.m. ET) Canada’s MLS Home Price Index for December.

(10:30 a.m. ET) Bank of Canada’s Business Outlook Survey and Survey of Consumer Expectations for Q4 are released.

With Reuters and The Canadian Press