Canadian stocks rise as oil eases and rate hike looms

Canadian equities edged higher on Monday as oil prices retreated from six-month highs, setting the stage for a week of central-bank meetings and corporate earnings that will test confidence in the AI-driven market rally. The Bank of Canada is widely expected to raise its benchmark interest rate on Wednesday, its first hike in three years, in an effort to curb inflation pressures from elevated oil prices. Wall Street futures were positive and TSX futures followed suit, with investors focusing on earnings from Celestia Inc. and PrairieSky Royalty Ltd. in Canada, and Verizon Communications Inc. and Welltower Inc. in the United States.

"The main message from global central banks grappling with this year’s macroeconomic surprises is that a relatively shallow rate-hike cycle is under way," said Bruce Kasman, global head of economics at JPMorgan. "G3 central banks are likely to remain on hold, but Canada should start its tightening cycle and first moves are expected from the U.K. and Sweden next month."

European markets rose modestly, with the STOXX 600 up 0.54%, the FTSE 100 gaining 0.51%, the DAX advancing 0.91% and the CAC 40 climbing 0.81%. In Asia, Japan’s Nikkei slipped 0.8% while Hong Kong’s Hang Seng rose 0.51%.

Oil prices fell after a surge to near six-month highs, easing on hopes of reduced hostilities between the United States and Iran, though continued attacks on Saudi facilities kept traders cautious. Brent crude dropped 1.45% to US$115.00 a barrel and WTI fell 2.2% to US$101.00 a barrel.

"Concerns over renewed military hostilities in the Middle East, which drove much of last week’s crude rally, have eased this morning, but the reprieve may prove temporary," said Vandana Hari, founder of Vanda Insights. "President Donald Trump has not dispelled market expectations that strikes on Iran could still follow after the Nov. 3 midterm elections. We therefore expect volatility to remain elevated, with risks still skewed to the upside."

Gold prices rose, with spot gold up 0.5% to US$4,014.49 an ounce and December futures gaining 0.5% to US$4,028.40. The Canadian dollar slipped to $1.4012 per U.S. dollar, trading within a range of 71.16 to 71.51 US cents, while the U.S. dollar index edged higher to 101.89. The euro fell 0.07% to US$1.1196 and the British pound slipped 0.16% to US$1.3352. U.S. 10-year Treasury yields were steady at 5.001%.