WTI oil prices continue to decline. The Canadian dollar weakened amid the federal elections

At the end of Monday, the Dow Jones Index (US30) rose by 0.28%. The S&P 500 Index (US500) gained 0.06%. The Nasdaq Technology Index (US100) was down 0.09%. Wall Street is gearing up for a busy week of important earnings releases and crucial economic data. Key GDP, inflation, and employment reports coming out this week are expected to provide new insights into the economic outlook. Investors are focused on upcoming quarterly results from Amazon, Apple, Meta Platforms and Microsoft, as well as signs of how President Trump’s sweeping tariffs affect the companies’ prospects. While earnings largely beat expectations, uncertainty surrounding the tariffs caused many companies to lower their second-quarter projections.

The Canadian dollar weakened to around $1.39, reversing gains from the previous session as investors awaited the final election results. Early expectations suggested that Canada’s ruling Liberal Party may retain power, although the final results remain uncertain, as the Liberals are still short of the 172 seats needed for a majority in the 343-seat House of Commons. Mark Carney’s bid for a stronger mandate to manage US tariffs faced opposition from stronger-than-expected Conservatives, raising the possibility of a minority government that may have to negotiate policy support.

The Mexican peso held below 19.6 per US dollar, near a six-month high of 19.51 on April 25, helped by the Bank of Mexico’s hawkish outlook. The country’s unemployment rate hit a record low of 2.2% in March, indicating a resilient labor market in the face of restrictive policies, and core inflation accelerated to 3.9% in mid-April — the highest level since September 2024 — confirming the Bank of Mexico’s decision to keep the benchmark rate at 11%. This large differential in real interest rates continues to attract carry-trade inflows.

Equity markets in Europe were mostly up on Monday. The German DAX (DE40) rose by 0.13%, the French CAC 40 (FR40) closed 0.50% higher, the Spanish IBEX35 (ES35) gained 0.75%, and the British FTSE 100 (UK100) closed positive 0.03%. Hopes for improved trade relations between the US and China also helped boost market sentiment. In Europe, traders were expecting corporate earnings: Porsche, Schneider Electric, and Deutsche Boerse are due to report.

WTI crude prices fell more than 2% to below $62 a barrel on Monday as concerns over rising tariffs threatened to reduce fuel consumption while supply rose. OPEC+ surprised markets by agreeing to raise output by about 411,000 barrels a day in May, reversing much of last year’s cuts, and US oil production is holding steady at a record 13.5 million barrels a day amid a rising rig count. Barrel discounts from Iran and Russia further boosted stocks in Asia, adding to the glut.

Asian markets were mostly rising on Monday. Japan’s Nikkei 225 (JP225) was up 0.38% yesterday, China’s FTSE China A50 (CHA50) was up 0.05%, Hong Kong’s Hang Seng (HK50) was down 0.04%, and Australia’s ASX 200 (AU200) was positive 0.36%. China reiterated that it is not involved in trade talks with the US, clarifying that Chinese President Xi Jinping has not spoken to President Donald Trump despite Trump’s statement in a recent Time interview. Domestically, expectations are rising that the Reserve Bank of Australia will make another 25 basis point rate cut in May amid growing economic uncertainty and worsening global trade concerns. Investors are now awaiting Australian inflation data due for release on Wednesday to gain further insight into the RBA’s future actions.