Everything You Need to Know on Monday: As Inflation Cools, Macklem Says Different Countries Will Cut Rates at Their Own Pace

Good morning mooers! Here are things you need to know about today's market:

● S&P/TSX 60 Index Standard Futures are trading at 1,316.60, up 0.42%.

● As inflation cools, Macklem says different countries will cut rates at own pace

● Crude oil prices drop as Israel, Iran downplay attacks, easing market concerns, ANZ bank says

● Honda nears deal with Canada to boost electric vehicle capacity

● Stocks to watch: Lululemon

Today, the Canadian dollar is trading at 72.65 cents US, a slight increase from Friday.

The S&P/TSX 60 Index Standard Futures (SXF) are currently trading at 1,316.60, which is up 0.42% from the previous close.

Bank of Canada governor Tiff Macklem says central banks will make monetary policy decisions geared toward their own economies, which means some countries may begin cutting interest rates before others.

Macklem made the comments while speaking to reporters on the sidelines of International Monetary Fund meetings in Washington, D.C. Friday.

"We've all been resolute in our commitment to restore price stability, and we've matched those words with action that has helped us all bring inflation down. As we enter the next phase of disinflation, countries may progress at different speeds," the governor said.

Macklem contrasted weak economic conditions in Canada and the European Union with the roaring economy of the United States.

"Ultimately, we gear monetary policy decisions to our own domestic circumstances," Macklem said.

Macklem's remarks come as economists increasingly expect Canada to begin cutting interest rates before the United States makes a move.

Crude oil prices fell at the start of the week after both Israel and Iran downplayed the severity of attacks between the two nations, ANZ Bank said in a Monday note.

Brent crude fell 1.5% to US$85.97 per barrel and West Texas Intermediate crude lost 1.2% to US$82.14/b at last look early Monday. Prices initially surged after Israel's retaliatory strike at Isfahan, Iran's third largest city, raising concerns that a wider conflict would disrupt oil supplies, the bank noted.

However, Iranian state media reports said the attack was a failure and an Iranian military official reportedly told Reuters the country is not planning to react immediately. These responses eased market concerns about escalation of conflict, ANZ Bank said.

Still, the market continues to face supply side issues, with the US announcing it has reinstated sanctions on Venezuela's oil industry. The move could disrupt the entering of roughly 600,000 barrels per day into the market, the bank said.

The oil market is likely to remain jittery as risks remain high even though the geopolitical risk premium appears to be easing, ANZ Bank noted.

Canada is on the verge of an agreement with Honda Motor Co. that would see the Japanese firm build electric vehicles and their components in the province of Ontario, according to people familiar with the matter.

The deal, expected to be announced within a week, involves a multibillion-dollar commitment by Honda for new facilities to process cathode active materials, build batteries, and assemble battery-powered vehicles — making southern Ontario a key hub of company’s EV manufacturing plans in North America. The Canadian government would subsidize a portion of the capital cost.

Honda has a manufacturing plant in Alliston, Ontario, about an hour’s drive north of Toronto, where it puts together Honda CR-V and Civic models. The company makes hybrid vehicles at factories in Ohio and Indiana, according to its website, and it plans to start manufacturing its first U.S.-made fully electric vehicles in Marysville, Ohio next year.

It says some employees at the Sumner, Wash. centre will be retrained and relocated to other facilities, but that "just over" 100 positions with be eliminated because of the closure.

The company says it decided to close the smaller distribution centre as part of a regular evaluation of its network.

Lululemon says its overall fulfilment strategy includes a multi-year investment to increase its capacity and support growth.

It says some of the employees could be moved to jobs at its recently opened distribution centre in the greater Los Angeles area.

The company says it is committed to supporting impacted employees through the transition.

Source: BNN Bloomberg, Financial Post, MT Newswire