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Markets were volatile on Tuesday morning as a truce between Israel and Iran appeared to be on thin ice. |
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Global shares rose after U.S. President Donald Trump announced the ceasefire between Israel and Iran, but the agreement appeared shaky with Israel accusing Iran of firing more missiles early on Tuesday. Iran denied that it had violated the ceasefire. |
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Risk assets rallied on initial announcement, with Wall Street and TSX futures rising. |
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“With markets now viewing the escalation risk as over, market attention is likely to shift towards the looming tariff deadline in two weeks’ time,” said Prashant Newnaha, senior Asia-Pacific rates strategist at TD Securities. |
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In Canada, investors are getting results from BlackBerry Ltd. Traders are also watching for May inflation data. A poll of economists provided by LSEG Data & Analytics expects the annual pace of inflation held steady at 1.7 per cent last month. |
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On Wall Street, markets are watching earnings from Carnival Corp. and FedEx Corp. |
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Overseas, the pan-European STOXX 600 was up 1.29 per cent in midday trading. Britain’s FTSE 100 rose 0.27 per cent, Germany’s DAX gained 2.11 per cent and France’s CAC 40 increased by 1.35 per cent. |
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In Asia, Japan’s Nikkei closed 1.14 per cent higher, while Hong Kong’s Hang Seng was up 2.06 per cent. |
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Brent crude futures were down US$2.48 at US$69 a barrel. West Texas Intermediate crude fell US$2.37 to US$66.14. |
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“The geopolitical premium has deflated, but tensions between Israel and Iran remain unresolved – and the risk of missteps and renewed escalation still lingers,” said SEB analyst Ole Hvalbye. |
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In other commodities, spot gold was down was down 1.2 per cent to US$3,326.87 an ounce. |
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The Canadian dollar strengthened against its U.S. counterpart. |
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The day range on the loonie was 72.78 US cents to 72.96 US cents in early trading. The Canadian dollar was up about 0.67 per cent against the greenback over the past month. |
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The U.S. dollar index, which weighs the greenback against a group of currencies, lost 0.36 per cent to 98.06. |
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The euro gained 0.18 per cent to US$1.1599. The British pound gained 0.62 per cent to US$1.3607. |
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In bonds, the yield on the U.S. 10-year note was flat at 4.349 per cent ahead of the North American opening bell. |
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(8:30 a.m. ET) Canadian CPI for May. The Street expects a rise of 0.5 per cent from April and a year-over-year gain of 1.7 per cent. |
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(8:30 a.m. ET) Canadian manufacturing sales for May. |
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(8:30 a.m. ET) U.S. current account deficit for Q1. |
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(9 a.m. ET) U.S. S&P CoreLogic Case-Shiller Home Price Index (20 city) for April. Estimates are increases of 0.1 per cent from March and 4.0 per cent year-over-year. |
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(9 a.m. ET) U.S. FHFA House Price Index for April. Estimate is a rise of 0.1 per cent from March and 3.5 per cent year-over-year. |
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(10 a.m. ET) U.S. Conference Board Consumer Confidence Index for June. |
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(10 a.m. ET) U.S. Fed Chair Jerome Powell testifies on the semi-annual monetary policy report to the House Financial Services Committee. |
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Also: NATO summit in the Hague, Netherlands through Wednesday |
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With Reuters and The Canadian Press |
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