Futures on the Mend

Futures linked to Canada's main stock index recovered from the declines of the previous session on Monday, with investors shifting focus from the Middle-East tensions to this week's G7 summit and U.S. Federal Reserve policy meeting.

The TSX Composite Index declined 111.4 points to close Friday at 26,504.35. On the week, however, the index grew 75 points, or 0.29%, including Thursday’s all-time high.

Futures were up 0.4% Monday.

The Canadian dollar gained 0.14 cents to 73.72 cents U.S.

The Middle-East escalation coincided with the Group of Seven leaders from Britain, Canada, France, Germany, Italy, Japan and the U.S., along with the European Union, gathering in Alberta, where U.S. President Donald Trump's tariffs have already strained ties.

Monday's discussions will center on advancing trade deals, with investors closely watching prospects of Canada moving closer to a trade agreement with the U.S.

On the company front, Bombardier and France-based aerospace firm Safran announced a defense technology innovation partnership on Monday.

Economically speaking, Canada Mortgage and Housing Corporation reported the six-month trend in housing starts was flat (0.8%) in May (243,407 units).

Also, the Canadian Real Estate Association was due out Monday with its MLS reading for May.

ON BAYSTREET

The TSX Venture Exchange dipped 0.66 points Friday to 721.13. On the week, the index was behind 0.47 points, or 0.07%.

ON WALLSTREET

Stock futures rebounded early Monday as investors were optimistic that the conflict between Israel and Iran may remain contained. The spike in oil prices due to the escalating conflict also eased.

Futures for the Dow Jones Industrials popped 255 points, or 0.6%, to 42,778.

Futures for the S&P 500 index hiked 39.75 points, or 0.7%, to 6,071.25

Futures for the NASDAQ cruised 178.50 points, or 0.8%, to 22,039.25

Traders have been closely watching the Middle East after Israel’s strike on Iran Friday. Iran launched missiles in retaliation, increasing the severity of conflict in the region.

The attacks continued for a fourth day Monday, with the two countries targeting each others’ energy facilities, an escalation which could rattle the global economy and markets further in the new week. Iran said it is considering shutting down the Strait of Hormuz, a key route for the global oil market. Israel claimed on Monday to have achieved “aerial superiority” over Iran, according to a military spokesperson.

Investors will monitor manufacturing survey data due Monday morning, which comes ahead of the Federal Reserve’s interest rate decision on Wednesday.

Fed funds futures are pricing in a nearly 100% likelihood of the central bank keeping rates unchanged, even as President Donald Trump has been pressuring Fed Chief Jerome Powell for a rate cut.

In Japan, the Nikkei 225 index regained 1.3% Monday, while in Hong Kong, the Hang Seng added 0.7%

Oil prices dipped 87 cents to $72.11 U.S. a barrel.

Gold prices fell $17.20 to $3,435.60 U.S. an ounce.