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TSX futures rise amid Middle East tensions
Economy
Futures on Canada's commodity-focused stock index rose on Tuesday,
as investors weighed renewed tensions in the Middle East and the sustainability of the artificial intelligence boom.
As of 2:06 PM, the standard S&P/TSX 60 Index futures contract was up 6 points, or 0.3%.
On Monday, the Toronto Stock Exchange's S&P/TSX Composite Index fell 0.18% to 35,212.32. The decline in mining stocks reflected lower gold prices, while lower oil prices, driven by OPEC+'s decision to raise production targets from August, weighed on energy stocks.
Oil prices rise slightly
Oil prices generally fell back to pre-war levels following the temporary ceasefire agreement between Washington and Tehran in June, but rose slightly again on Tuesday amid reports of new attacks on vessels in the Strait of Hormuz.
As of 11:41 a.m., Brent crude futures, the global benchmark, rose 0.9% to $72.61 per barrel, while West Texas Intermediate futures rose 0.7% to $69.03 per barrel.
Iran's military fired at least two missiles at commercial vessels transiting the Strait of Hormuz on Monday night, ending a weeklong pause in attacks under the US-Iran agreement, Axios reported on Tuesday, citing two US officials. According to the publication, the US is likely to launch retaliatory strikes against Iranian targets.
Earlier, the UK Marine Trade Organization (UKMTO) reported receiving a report from a tanker heading south off the coast of Oman: the vessel was struck by an unidentified projectile, causing a fire. Iran has not officially claimed responsibility for the attack, although anonymous sources cited by Iranian state television suggested the strike targeted a tanker carrying natural gas from Qatar.
Oil prices have been declining since the signing of the interim peace agreement in June. Following the outbreak of conflict in late February, oil prices rose sharply, at one point exceeding $110 per barrel, raising fears of a global inflation surge.
Gold Falls
Gold prices fell on Tuesday as investors prepare for the release of the minutes of the Federal Reserve's latest meeting later this week. As of 12:30 PM, spot gold prices were down 0.6% at $4,140.89 per ounce, while gold futures were down 0.4% at $4,153.41 per ounce.
The US dollar, boosted by the rise in benchmark 10-year Treasury yields to a two-week high, is putting pressure on gold prices. A stronger dollar makes gold more expensive for foreign buyers.
"Volatility in the currency market may remain subdued ahead of tomorrow's FOMC minutes release and given the largely empty US data calendar for today," ING analysts noted in their review.
The main focus this week is the upcoming release of the minutes of the Federal Reserve's June meeting. At that meeting, the regulator left interest rates unchanged in the range of 3.5%–3.75%, although a number of officials allowed for the possibility of increasing borrowing costs this year.