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(CEP News) - The commodity price surge continued on Monday as oil prices surged more than $3 to a record $143.67 a barrel at Nymex.
Analysts say political worries have boosted the crude along with the other usual suspects. "U.S. dollar weakness, political tensions and threats of shutdowns currently remain the main price drivers in this market, with the danger of conflict with Iran now getting top billing," wrote Sacha Tihanyi, associate currency strategist at Scotia Capital in a note to clients. The Canadian dollar wasn't able to benefit from the oil rally or from a Statistics Canada report showing April GDP rising 0.4% against the 0.3% expected. Instead, the loonie is down 0.0030 to 0.9864 against the U.S. dollar (1.0138 USD/CAD) and down 0.60 to 104.37 against the yen. Otherwise, currencies are trading in a relatively tight range. The U.S. dollar is down 0.34 to 105.80 against the yen and the Dollar Index is up 0.031 to 72.391. The euro is down 0.0020 to 1.5773 against the U.S. dollar, up 0.0025 to 1.5990 against the Canadian dollar, down 0.0008 to 0.7909 against the pound sterling and is lower by 0.71 to 166.89 against the yen. The pound sterling is down 0.0006 to 1.9944 against the U.S. dollar and up 0.0049 to 2.0217 against the Canadian dollar. The European market has been driving fixed income following a higher-than-expected report on euro zone CPI for June. Inflation hit 4.0% against the 3.9% expected and 3.6% in May. In Germany, returns on two-year German bonds are up 16.1 bps to 4.60%, with five-year yields up 16.1 bps to 4.65%, 10-year yields up 10.6 bps to 4.63% and 30-year yields up 5.4 bps to 4.86%. Yields on UK two-year bonds are up 10.3 bps to 5.24%, with five-year yields up 9.8 bps to 5.19%, 10-year yields up 10.4 bps to 5.14% and 30-year yields up 7.0 bps to 4.69%. Yields on two-year Canadian government bonds are up 5.6 bps to 3.23%, with five-year yields up 3.7 bps to 3.43%, 10-year yields up 1.0 bps to 3.71% and 30-year yields up 0.7 bps to 4.07%. The Canadian 10-year note is yielding 27.74 bps less than the U.S. 10-year note. U.S. two-year yields are up 5.6 bps to 2.68%, with five-year yields up 3.4 bps to 3.38%, 10-year yields up 2.3 bps to 3.99% and 30-year yields up 0.8 bps to 4.53%. 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 6.6 bps to 130.70 bps. North American equity markets opened higher with the resource-heavy Toronto Stock Exchange leading the way. Toronto's S&P/TSX composite index is up 88 points to 14,443, the Dow Jones industrial average up 13 points to 11,359, the S&P 500 up 4 points to 1,283 and the Nasdaq up 2 points to 2,318. European stock markets are mixed, with the Eurostoxx up 25 points to 2,901, the UK FTSE 100 up 70 points to 5,600 and the German DAX down 24 points to 6398. All data taken at 9:35 a.m. EDT. By Adam Button,
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