Oil rose to a record $143.67 on concerns of a conflict between Israel and Iran but pulled back after the U.S. Energy Information Administration said U.S. oil use in April was the lowest since 2003.

WTI crude oil is up $0.87 to $141.08 per barrel after hitting the record high of at 6:29 a.m. EDT. In London, Brent crude is up $0.94 to $141.25.

Toronto's S&P/TSX composite index is up 42 points to 14,397, the Dow Jones industrial average up 63 points to 11,409, the S&P 500 up 9 points to 1,287 and the Nasdaq down 0 points to 2,315.

European stock markets closed with the Eurostoxx up 30 points to 2,906, the UK FTSE 100 up 96 points to 5,626 and the German DAX down 4 points to 6,418.

The Canadian dollar is down nearly a cent. Market participants say economic data and commodity prices have had little effect on the currency. Instead, month-end considerations have been driving currency pairs.

The Canadian dollar is down 0.0071 to 0.9824 against the U.S. dollar (1.0179 USD/CAD) and down 0.68 to 104.28 against the yen.

Canadian fixed income trading will close early at 1 p.m. because of the Canada Day holiday on Tuesday. Yields on Canadian bonds were rising following the release of a better-than-expected April Canadian GDP. Statistics Canada said GDP rose 0.4% in the month against the 0.3% expected.

Worldwide fixed income has been driven by a report from Europe showing a rise in inflation and potentially leading to more interest rate increases. Euro zone inflation reached 4.0% in June, up from both the 3.9% reading expected and the previous month's 3.7%.

"Although latest available data show that core inflation is still only rising modestly at this stage, this will be of limited comfort to the European Central Bank," said Global Insight chief European and UK economist Howard Archer. "The ECB is concerned that the higher the headline inflation rate goes, and the longer it stays elevated, the greater will be the danger of major second round inflationary effects occurring."

Yields on two-year Canadian government bonds are up 7.9 bps to 3.25%, with five-year yields up 6.5 bps to 3.46%, 10-year yields up 3.8 bps to 3.74% and 30-year yields up 1.9 bps to 4.08%. The Canadian 10-year note is yielding 23.78 bps less than the U.S. 10-year note.

At the Canadian short end of the curve, bankers' acceptance futures contracts were down. The September contract was down 6 ticks to 96.59 and December contracts down 4 ticks to 96.73.

U.S. two-year yields are up 0.8 bps to 2.63%, with five-year yields flat at 3.35%, 10-year yields up 1.2 bps to 3.98% and 30-year yields flat at 4.52%. The Eurodollar September 08 contract is down 3.0 ticks to 97.06. The yield curve is flatter, with the 10/2-year spread down 2.8 bps to 134.47 bps.

In Germany, returns on two-year German bonds are up 15.5 bps to 4.60%, with five-year yields up 15.8 bps to 4.64%, 10-year yields up 10.8 bps to 4.63% and 30-year yields up 5.7 bps to 4.86%.

Yields on UK two-year bonds are up 8.7 bps to 5.23%, with five-year yields up 8.6 bps to 5.17%, 10-year yields up 9.1 bps to 5.13% and 30-year yields up 6.1 bps to 4.68%.

The U.S. dollar is up 0.01 to 106.15 against the yen and the Dollar Index is up 0.180 to 72.540.

The euro is down 0.0048 to 1.5745 against the U.S. dollar, up 0.0061 to 1.6026 against the Canadian dollar, down 0.0007 to 0.7909 against the pound sterling and is lower by 0.46 to 167.15 against the yen.

The pound sterling is down 0.0041 to 1.9909 against the U.S. dollar and up 0.0100 to 2.0268 against the Canadian dollar.

The front month gold contract at the Chicago Board of Trade is down $5.10 to $925.80 per ounce.

All data taken at 12:45 p.m. EDT.

By Adam Button, This email address is being protected from spam bots, you need Javascript enabled to view it , edited by Cristina Markham, This email address is being protected from spam bots, you need Javascript enabled to view it

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