Nymex crude is down $1.28 to $124.59 after hitting an all-time high of $126.27 on Friday.

"The commodity is certainly due for a small corrective move, however the overall outlook continues to call for oil to remain at historically high levels," said Camilla Sutton, a currency strategist at Scotia Capital. "A reasonable pullback would push oil back towards $120/barrel, which is a level that still risks a dramatic worsening of the global economic outlook."

Shortly after the North American equity market open, Toronto's S&P/TSX composite index is up 72 points to 14593, the Dow Jones industrial average is up 28 points to 12774, the S&P 500 is up two points to 1390 and the Nasdaq is up two points to 2448.

European stock markets are also higher, with the Eurostoxx up 11 points to 3239, the UK FTSE 100 up 14 points to 6219 and the German DAX up 32 points to 7035.

Yields on two-year Canadian government bonds are down 1.7 bps to 2.72%, with five-year yields down 2.6 bps to 3.12%, 10-year yields down 4.0 bps to 3.55% and 30-year yields down 4.3 bps to 4.04%. The Canadian 10-year note is yielding 21.35 bps less than the U.S. 10-year note.

U.S. two-year yields are up 0.8 bps to 2.25%, with five-year yields flat at 2.97%, 10-year yields down 0.6 bps to 3.76% and 30-year yields down 1.2 bps to 4.51%. The Eurodollar September 08 contract is down 2.0 ticks to 97.35. The yield curve is flatter, with the 10/2-year spread down 1.6 bps to 150.89 bps.

British fixed income markets were down after numerous components of the UK's April producer prices data series rose to record highs. The Office for National Statistics said producers' input prices rose 2.4% in April from 1.7% in March, well above market forecasts for a 2.0% increase in seasonally adjusted terms. Year-over-year, April input prices rose 23.1%; the highest increase since records began in 1986. It follows a 20.5% rise in March and forecasts for a 21.7% increase.

Yields on UK two-year bonds are up 7.4 bps to 4.37%, with five-year yields up 5.5 bps to 4.32%, 10-year yields up 4.2 bps to 4.62% and 30-year yields up 1.6 bps to 4.47%.

In Germany, returns on two-year German bonds are up 6.4 bps to 3.76%, with five-year yields up 5.3 bps to 3.81%, 10-year yields up 2.5 bps to 4.02% and 30-year yields up 3.7 bps to 4.54%.

The Japanese yen is the main mover in foreign exchange following the release of several pieces of Japanese data in the overnight.

Japanese bankruptcies rose 8.3% year-over-year in April after rising 8.0% in March. Also, according to a survey by Eco Watchers, the current conditions index for Japan declined to a reading of 35.5 in April compared to March's 36.9 level. The economic outlook indicator fell to 36.1 compared to the previous 38.2 reading.

The euro was up 1.23 points to 160.44 against the yen. It began rising at 2:00 a.m. EDT from 159.00 to a session high of 160.73.

The Canadian dollar is down 0.0009 to 0.9939 against the U.S. dollar (1.0062 USD/CAD) and up 0.8450 to 103.1300 against the yen.

The U.S. dollar is up 0.90 to 103.76 against the yen and the Dollar Index is up 0.160 to 73.210.

The euro is down 0.0013 to 1.5469 against the U.S. dollar, up 0.0003 to 1.5564 against the Canadian dollar, down 0.0031 to 0.7892 against the pound sterling and is higher by 1.30 to 160.51 against the yen.

The pound sterling is up 0.0063 to 1.9603 against the U.S. dollar and up 0.0082 to 1.9722 against the Canadian dollar.

The front month gold contract at the Chicago Board of Trade is down $5.20 to $880.70 per ounce.

All data taken at 9:34 a.m. EDT.

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