Index Update:

Canadian stocks ended nearly flat on Monday after today's Inflation data lowered concerns of a near-term rate hike by the Bank of Canada while traders assessed fresh Crude Oil Supply concerns after Saudi Arabia announced the closure of its East-West pipeline on Friday.

After opening below the previous week's close, today the benchmark S&P/TSX Composite index remained volatile throughout the session before settling at 35,702.53, up by 5.04 points (or 0.01%).

Macro Update:

While the conflict in the Middle East continues to lift energy costs, gasoline prices rose 22.8% from a year earlier.

The BoC’s preferred median and trimmed-mean measures of Core Inflation were also unchanged at 2.0% and 1.9%, respectively. The data suggests underlying price pressures remained under control, even as the BoC grows increasingly concerned about inflation risks stemming from the war.

Governor Macklem warned earlier this month that the longer the conflict persists, the more likely higher energy prices are to feed through the economy. Investors widely expect the US Fed to raise rates on Wednesday.

Top Movers:

The best performers of the session on the S&P/TSX Composite were Thomson Reuters Corp (TSX:TRI), which rose 8.90% or 12.01 points to trade at 146.94 at the close. Meanwhile, Curaleaf Holdings Inc (TSX:CURA) added 5.72% or 0.76 points to end at 14.05 and Descartes Systems Group Inc (TSX:DSG) was up 5.55% or 5.84 points to 111.16 in late trade.

Our Stance:

From a technical perspective, immediate support is positioned near 35,500. A sustained hold above this level could help stabilize the index and preserve the broader bullish technical outlook, potentially supporting a recovery towards the recent high near 35,850.

Commodity Update:

The dollar edged higher near a two-week peak as rising oil prices pushed Treasury yields upward and strengthened expectations of a Federal Reserve rate hike this week. Gold gained 0.06% to 4354.20, while silver declined 0.10% to USD 64.06 and copper advanced 0.43% to USD 14,081.00. Brent Crude climbed 1.60% to USD 107.39 as renewed Houthi attacks on Saudi Arabia heightened supply disruption concerns. Delays in talks over reopening the Strait of Hormuz further supported crude prices.

Technical Update:

The S&P/TSX Composite Index advanced 0.01% on Monday to close at 35,702.53, indicating limited near-term buying interest amid broader technical weakness. The index continues to trade firmly below its 50-day Simple Moving Average (SMA), which is acting as a key dynamic resistance level and signalling continued technical weakness. The 14-day Relative Strength Index (RSI) stands at 42.82, suggesting weak-to-moderate momentum and limited buying interest. Immediate support is positioned near 35,500. A sustained hold above this level could help stabilize the index and preserve the broader bullish technical outlook, potentially supporting a recovery towards the recent high near 35,850.