Equities
Global markets shot higher as investors breathed a sigh of relief after the U.S. and Iran agreed to a two-week ceasefire, with expectations that energy supplies through the Strait of Hormuz could resume.
Wall Street futures rallied after major North American markets closed little changed yesterday ahead of the news.
TSX futures followed sentiment higher.
On Wall Street, markets are watching earnings from Delta Air Lines Inc. and Constellation Brands Inc.
“The rally will need to be backed up by tangible progress in negotiations to hold. The underlying question of whether Iran will permanently reopen the Strait of Hormuz and whether a lasting deal can be reached is still very much unresolved,” said Josh Gilbert, market analyst for eToro.
“If the two weeks pass without a deal, expect a sharp and unforgiving reversal of this relief rally.”
Overseas, the pan-European STOXX 600 was up 4.4 per cent in morning trading. Britain’s FTSE 100 rose 3.22 per cent, Germany’s DAX jumped 5.3 per cent and France’s CAC 40 advanced 4.91 per cent.
In Asia, Japan’s Nikkei closed 5.39 per cent higher, while Hong Kong’s Hang Seng rose 3.09 per cent.
Commodities
Oil fell below US$100 per barrel after the ceasefire deal between the U.S. and Iran, subject to the immediate and safe reopening of the Strait of Hormuz.
Brent futures dropped 16.3 per cent to US$91.48 a barrel, while West Texas Intermediate (WTI) crude slid 17.8 per cent to US$92.82 a barrel.
“In theory, the 10–13 [million barrels per day] of crude oil and product supply stranded behind the Strait should now be gradually released,” said Tamas Varga, analyst at brokerage PVM Oil.
“Whether the pre-March status quo will be re-established depends entirely on whether the truce can be turned into a permanent peace during the negotiations in Pakistan.”
In other commodities, spot gold was up 1.7 per cent at US$4,783.78 an ounce. U.S. gold futures for June delivery gained 2.7 per cent to US$4,812.60.
Currencies and bonds
The Canadian dollar strengthened against its U.S. counterpart.
The day range on the loonie was 71.93 US cents to 72.34 US cents in early trading. The Canadian dollar was down about 1.8 per cent against the greenback over the past month.
The U.S. dollar index, which weighs the greenback against a group of currencies, tumbled 1.26 per cent to 98.60. The greenback traded at $1.3843.
The euro advanced 1.01 per cent to US$1.1716. The British pound climbed 1.4 per cent to US$1.3480.
In bonds, the yield on the U.S. 10-year note was last down at 4.244 per cent.
Economic news
China’s aggregate yuan financing and new yuan loans
Japan’s real cash earnings
Euro zone retail sales
Germany’s factory orders
2 p.m. ET: U.S. Fed minutes from March 17-18 meeting.
With Reuters and The Canadian Press