Investors are waiting to see on Monday how the U.S. strike on Iranian nuclear targets over the weekend would affect global markets.Yuki Iwamura/The Associated Press
Equities
World shares slipped on Monday and oil prices briefly hit five-month highs before retracing gains as investors awaited possible retaliation from Iran following U.S. attacks on its nuclear sites, with fallout risks to global trade and inflation.
Oil prices were up just 0.4 per cent, after rising as much as 5.7 per cent overnight.
The attacks Saturday raised the stakes in the war between Israel and Iran. World share markets looked moderately resilient, with S&P 500 futures and Nasdaq futures were both up 0.2 per cent. Treasury yields were little changed. The TSX future was up 0.32 per cent.
“I believe what we are thinking is or the thinking is that it is going to be a short conflict. The one big hit by the Americans will be effective and then we’ll get back to sort of business as usual, in which case there is no need for an immediate, panicky type of reaction,” said Neil Newman, managing director of Atris Advisory Japan.
In Europe, Germany’s DAX was down 0.27 per cent at 23,288.45 and the CAC 40 in Paris was down 0.45 per cent at 7,555.78. Britain’s FTSE 100 was down 0.04 per cent at 8,771.47
In Tokyo, the Nikkei 225 edged 0.1 per cent lower to 38,354.09, with gains for defense contractors, oil companies and miners helping to make up for broad losses. Hong Kong’s Hang Seng regained lost ground, climbing 0.7 per cent to 23,689.13.
Commodities
Brent and U.S. West Texas Intermediate crude were both up 0.4 per cent at US$77.32 and US$74.10 a barrel, respectively.
“The current geopolitical escalation provides the fundamental catalyst for (Brent) prices to traverse higher and potentially spiral towards $100, with $120 per barrel appearing increasingly plausible,” said Sugandha Sachdeva, founder of New Delhi-based research firm SS WealthStreet.
Spot gold was down 0.2 per cent at US$3,359.99 an ounce, as of 4:20 a.m. ET. U.S. gold futures fell 0.3 per cent to US$3,375.20.
Currencies and bonds
The Canadian dollar weakened against its U.S. counterpart.
The day range on the loonie was 72.46 US cents to 72.82 US cents in early trading. The Canadian dollar was down about 0.32 per cent against the greenback over the past month.
The U.S. dollar index, which weighs the greenback against a group of currencies, was up 0.55 per cent to 99.25.
The euro was down 0.49 per cent to US$1.1469. The British pound was down 0.44 per cent to US$1.3392.
In bonds, the yield on the U.S. 10-year note was last up at 4.400 per cent ahead of the North American opening bell.
In corporate news, Canada’s top executives got a nearly 20-per-cent raise last year as stock prices soared and boards increasingly opted to pay their senior leaders with shares over options.
Economic news
Japan and Euro zone PMI
(9:45 a.m. ET) U.S. S&P global manufacturing and services PMI for June.
(10 a.m. ET) U.S. existing home sales for May. The Street expects an annualized rate decline of 1.0 per cent.
With Associated Press