S&p/tsx Composite Index Rises As Oil Falls 5.8% After U.S.-Iran Deal
The s&p/tsx composite index pointed higher as oil prices fell 5.8% to US$79.98 a barrel after the United States and Iran said they had reached an initial framework deal. TSX futures were up 0.8 per cent at 8:24 a.m. ET, alongside a jump in U.S. equity futures and a drop in the U.S. 10-year note yield to 4.455 per cent.
John Hardy on market relief
0.8 per cent in TSX futures came as Dow futures rose 0.9 per cent, S&P futures climbed 1.23 per cent and Nasdaq futures advanced 2.07 per cent at 8:24 a.m. ET. John Hardy, a strategist at Saxo Bank, called the framework deal “about as supportive as you can get” for markets, adding, “What do you add on from here to get sentiment even bubblier?”
5.1 per cent was the drop in Brent crude futures, which fell to US$82.86 a barrel, while spot gold climbed 2.8 per cent to US$4,336.49 per ounce and U.S. gold futures for August delivery rose 2.8 per cent to US$4,358.00. The move showed traders pushing money away from energy and into assets that typically benefit when oil and inflation expectations ease.
Strait of Hormuz pricing
4.99 per cent was the gain in Japan’s Nikkei, while Hong Kong’s Hang Seng finished 0.50 per cent higher and the pan-European STOXX 600 was up 0.67 per cent in morning trading. Britain’s FTSE 100 added 0.09 per cent, Germany’s DAX rose 1.36 per cent and France’s CAC 40 advanced 1.21 per cent, leaving the rally broad rather than confined to one region.
71.44 US cents to 71.68 US cents was the intraday range for the Canadian dollar, which strengthened against its U.S. counterpart as the U.S. dollar index lost 0.27 per cent to 99.225 and the euro gained 0.41 per cent to US$1.1671. The British pound also rose 0.18 per cent to US$1.3430, while the U.S. 10-year note yield eased to 4.455 per cent.
Tamas Varga on oil flows
20 million barrels per day is the flow level Tamas Varga said it would take time to regain through the chokepoint, and he said estimates for full resumption range “from weeks to months.” The analyst at PVM Oil Associates said, “Financial investors are, therefore, merely borrowing future physical supply, hence the current cheapening of oil prices.”
2026 is the year Varga said a slow resumption could still leave the market in supply deficit, which keeps the oil selloff tied to expectations rather than a solved shipping problem. Canopy Growth Corp. was also reporting results in Canada, while Canada housing starts for May were scheduled for 8:15 a.m. ET.
