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Equity
Wall Street futures gained early Monday to ease concerns about aggressive Federal Reserve rate hikes as traders weigh more heavily on U.S. bank gains. Major European markets also rose in the morning trading. TSX futures advanced with new half-week inflation figures.
At the beginning of the pre-market period, futures linked to the three main US indices rose by about 1%. The Dow, Nasdaq and S&P 500 are coming off a week of losses despite recovering from Friday’s session. The S & P / TSX composite index ended Friday at 0.36%.
“Investors continue to focus on gains this week, to determine which companies are best placed to withstand the difficult macroeconomic environment and rising interest rates,” Swissquote senior analyst Ipek Ozkardeskaya said in an initial note .
“The good news is that the week begins with an improved odds of seeing a 75 basis point rise at the next FOMC meeting, rather than a 100 basis point rise. The probability of a 75 basis point rise basic returns to 70%, more than about 20% after the inflation report released last week in the US. “
On Monday, U.S. investors made more gains from U.S. banks ahead of the start of trading.
Goldman Sachs reported earnings of $ 2.8 billion, or $ 7.73 per share, for the quarter ended June 30, compared to $ 5.3 billion, or $ 15.02 per share, a year earlier. However, the final result exceeded market forecasts. According to Refinitiv, analysts expected earnings per share in the most recent quarter of US $ 6.58. Shares rose more than 3 percent in pre-market trading.
Bank of America recorded a drop in profits, affected by the weakening of investment banking income. Earnings applicable to ordinary shareholders fell to $ 5.93 million, or 73 cents per share, during the quarter ended June 30, from $ 8.96 million, or $ 1.03 million per share, one year before.
Later in the week, Netflix reports on Tuesday, with markets watching closely how the latest numbers of playback giant subscribers are piling up. Tesla reports Wednesday.
In this country, Suncor Energy Inc. says it has reached an agreement with activist investor Elliott Investment Management LP that will have it conduct a strategic review of its downstream retail business with the goal of “unlocking shareholder value.” The agreement will also involve the incorporation of three new independent directors into the company’s board.
Meanwhile, Canada Mortgage and Housing Corp. said the annual independent rate of housing starts in the country, adjusted for seasons, was 273,841 units in June, 3% less than in May.
The key economic statement for the week comes Wednesday when Statistics Canada releases June inflation figures. Earlier this month, the Bank of Canada surprised by raising interest rates by a full percentage point in an effort to curb high price pressures. The annual inflation rate in May reached a decade-long high of 7.7%.
“RBC Economics predicts the CPI inflation rate to rise to 8.0% year-on-year,” said Alvin Tan, Royal Bank’s Asia foreign exchange strategist.
“This continued acceleration was probably largely driven by higher food and energy prices. About half of inflation has recently been driven by global external forces.”
Abroad, the pan-European STOXX gained 1.41 percent. The British FTSE 100 rose 1.40%. Germany’s DAX and France’s CAC 40 rose 1.41% and 1.29%, respectively. The European Central Bank makes its next policy decision on Thursday. Markets expect the central bank to raise interest rates for the first time in a decade.
In Asia, Hong Kong’s Hang Seng rose 2.70 percent, helped by earnings from technology stocks. Japan’s markets were closed.
Goods
Crude oil prices rose at first, as reduced supply helped offset concerns about the health of the global economy and the potential impact of COVID-19 restrictions in China.
The daily range in Brent is $ 99.46 to $ 104.36. The range at West Texas Intermediate is $ 95.85 to $ 100.57. Both benchmarks experienced weekly declines last week.
“Supply risks remain evident in international markets and futures curves continue to decline,” said Jeffrey Halley, senior analyst at OANDA.
“Despite the turmoil in speculative futures markets, real-world dynamics remain as favorable to oil prices as ever. If Russia does not change gas exports to Europe again at the end of the week, Brent crude could find again -is close to $ 110 a barrel.
Russia is scheduled to complete maintenance on the North Stream 1 pipeline on July 21, although many fear that the resumption of gas flows could be delayed as a tactic of Moscow’s attack on Ukraine.
Meanwhile, Reuters reports that U.S. Treasury Secretary Janet Yellen said Saturday she had productive meetings on a proposed Russian oil price cap with a number of countries on the sidelines of a meeting of the Group’s chief financial officers. of the top 20 economies.
In China, massive testing of COVID-19 in parts of the country this week again raises concerns that the blockades may continue, affecting demand from one of the world’s top oil consumers.
In other commodities, gold prices rose as the US dollar retreated from 20-year highs.
Cash gold rose 0.7 percent to $ 1,719.49 an ounce in the early hours of Monday morning, after falling to its lowest level in nearly a year last week. U.S. gold futures gained 0.6% to $ 1,714.30.
“Overall, gold price action remains uninspiring with limited-range recoveries, while falls, when they occur, are much larger and faster-reaching,” Halley said.
“The fate of gold this week is based on the hope that the rebound in investor sentiment seen elsewhere will inspire more weakness in the US dollar.”
Coins
The Canadian dollar advanced in the early hours of the morning, supported by a positive risk sentiment, improving crude oil prices and a retreat from its US counterpart.
The loonie’s day range is from 76.71 US cents to 77.11 US cents.
“CAD has average performance in the session despite stronger stocks and stronger crude oil in the session,” said Shaun Osborne, chief currency strategist at Scotiabank.
“Even with increased risk appetite, firmer commodities and the BoC has risen 100 basis points, it looks like CAD may not gain much traction,” it said in a note. “National growth concerns probably account for part of the CAD’s delayed performance.”
The key event of the week for the loonie will be Wednesday’s inflation report. Investors will also receive retail sales figures by the end of the week.
In world markets, the US dollar index, which compares the green dollar to a basket of currencies, fell 0.35% to 107.48 and fell 1.8% from two-decade highs. last week, according to Reuters data.
The euro rose 0.5% to $ 1.0149 after falling below parity with the US dollar last week for the first time since 2002.
Other risk-sensitive currencies were also higher.
The New Zealand dollar hit a 10-day high against the greenback of $ 0.62, up 0.4 percent.
The Australian dollar also touched a one-week high, according to Reuters.
In bonds, U.S. 10-year bond yields rose to 2.961% during the pre-dawn period.
More company news
Delta Air Lines will buy 100 Boeing MAX 10 aircraft worth about $ 13.5 billion at list prices and has options to buy 30 more, he said Monday. Reuters reported in March that Delta was advancing towards an order for 100 MAX 10 aircraft and reported last week that Airbus was in talks for Delta to expand an existing order for A220 aircraft. Delta, who made the announcement at the Farnborough Air Show, said it would begin receiving deliveries in 2025.
Economic news
(815 am ET) Housing in Canada begins in June.
(10:00 ET) Housing Market Index of the National Association of U.S. Home Builders.
With Reuters and The Canadian Press