Oil Price Rally Revives Inflation Concerns for Canadian Equities

Futures tracking Canadian equities edged lower on Monday as rising oil prices revived inflation concerns. Rising oil prices have been a point of contention for investors, and the current rally is no exception. Oil prices resumed their rally after US President Donald Trump rejected Iran's latest proposal to reopen the Strait of Hormuz.

This rejection has renewed concerns that energy-driven inflation shocks could keep interest rates higher for longer. As a result, yields moved higher, putting pressure on credit-sensitive stocks. Meanwhile, falling gold prices pressured mining shares.

The Canadian GDP data due Tuesday is expected to offer cues on economic momentum and the future policy path of the Bank of Canada. Investors will be closely watching this data as it could have significant implications for interest rates and overall market performance.