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CIBC On the Week Ahead In Canada Economics

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-- Manufacturing Shipments data due out next Friday "should look reasonably healthy" for March, but will look weaker in volume terms, says CIBC's Avery Shenfeld. CIBC expects a 3.5% rise, in line with consensus, and following a prior gain of 3.6%.

Existing Home Sales on Thursday and Housing Starts on Friday, both for Aprii, won't alter the picture of a sector that's been "a drag on growth" in the past year, Shenfeld adds. CIBC forecasts 240k housing starts, versus a consensus 245k.

Also on the calendar for next week is The Market Participants Survey, due out 10.30am ET on Monday. The survey is conducted quarterly. Bank of Canada staff reach out to a diverse set of participants in financial markets to gather their views on key macroeconomic and financial variables as well as on monetary policy.

Then on Wednesday at 1.30pm ET, a summary of monetary policy deliberations by Governing Council for the policy decision that was announced two weeks earlier will be released. That same day, Michelle Alexopoulos, External Deputy Governor, addresses the Ottawa Economics Association (OEA) - Canadian Association of Business Economics (CABE), Ottawa, Ontario.

In terms of further data, March Wholesale Sales (ex-petroleum) is due out Thursday, and CIBC forecasts 1.4%. Also, March Int'l Sec. Transactions is due out Friday.

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Oil & Energy

Market Chatter: Aramco, Adnoc Continue Hormuz Oil Shipments Despite Escalating Conflict

Saudi Aramco and Abu Dhabi National Oil continued moving crude cargoes through Hormuz despite the conflict, Bloomberg reported Friday, citing people familiar with the situation.Non-Iranian crude flows through the Strait of Hormuz have dropped to roughly 500,000 barrels per day since early March, from about 13.6 million b/d before the conflict began.Saudi Arabia's Aramco Trading and the UAE's Adnoc remained among the few firms still shipping crude through the waterway after Iran effectively shut the route nearly 10 weeks ago.To move cargoes out of the Gulf, companies have accepted higher shipping risks and costs, while many tankers switched off transponders to reduce the chances of detection, according to Bloomberg.Iran intensified pressure around Hormuz during the conflict and seized a vessel on Friday after facing US attacks, although the ship reportedly carried sanctioned Iranian crude oil, the analysis added.Adnoc has emerged as one of the earliest companies to resume exports of crude, fuel and gas through Hormuz, including offers of Upper Zakum crude loaded near Fujairah outside the Persian Gulf.The supertanker Basrah Energy exited the Gulf in late April after loading crude from Zirku Island on April 17, before transferring cargo near Sohar to another vessel headed toward China, according to Vortexa data cited by Bloomberg.Another supertanker, Fujairah Energy, remained inside the Gulf near Abu Dhabi as of Thursday after receiving crude through ship-to-ship transfers, the report added, citing Kpler data.Adnoc provisionally chartered Fujairah Energy for crude deliveries into Asia between May 15 and May 17, as the vessel could continue receiving additional oil cargoes before leaving the Gulf.South Korea's Sinokor Group controlled both vessels and continued operating actively in the Gulf while many shipowners avoided the region because of elevated security risks and soaring charter rates.As attacks escalated across the Middle East earlier this week, Iranian drones struck Adnoc Logistics & Services tanker Barakah near Oman while the vessel moved through Hormuz with its transponders switched off.Shipping data showed fuel cargoes leaving the UAE's Hamriyah port inside the Persian Gulf after companies loaded products from onshore storage onto tankers.Oil and chemical tanker Musik collected a naphtha cargo from Hamriyah on March 26 before crossing the Strait of Hormuz on May 1, although the company behind the shipment remains unclear.Despite growing risks around Hormuz, several companies continued moving cargoes through the waterway with vessel transponders switched off, including Greece-based Dynacom Tankers Management.Mercuria Energy Group Chief Executive Marco Dunand said last month that his company also managed to move ships through Hormuz, adding at the FT Global Commodities Summit that actual tanker traffic exceeds visible vessel-tracking data.The report said at least 25 tankers have transported cargoes through Hormuz since the conflict escalated, including very large crude carriers capable of hauling about 2 million barrels and smaller Aframax ships carrying roughly one-third that volume.has reached out to Saudi Aramco and Adnoc for comment.(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

Sectors

Sector Update: Financial Stocks Decline Friday Afternoon

Financial stocks were lower Friday afternoon, with the NYSE Financial Index decreasing 0.2% and the State Street Financial Select Sector SPDR ETF (XLF) shedding 0.5%.The Philadelphia Housing Index rose 0.3%, and the State Street Real Estate Select Sector SPDR ETF (XLRE) added 0.5%.Bitcoin (BTC-USD) eased 0.1% at $79,953, and the yield for 10-year US Treasuries was down 2.6 basis points to about 4.37%.In economic news, the April employment report showed nonfarm payrolls rose by 115,000, above the 65,000 jobs rise expected in a Bloomberg survey, while March payrolls were revised up to a 185,000 increase and February payrolls were revised down to a 156,000 decrease.The University of Michigan's preliminary consumer sentiment index fell to 48.2 in May from 49.8 in April, lower than the expectations for a smaller decrease to 49.5 in a Bloomberg poll.In corporate news, Block (XYZ) shares jumped past 9% after the company late Thursday reported higher adjusted earnings and revenue that also beat analysts' estimates.Two Harbors Investment (TWO) shares rose 1.2% after the firm said it signed an amended merger agreement with CrossCountry Mortgage to increase the all-cash buyout offer to $12 per share from $11.30.Goldman Sachs-backed (GS) Go is seeking a valuation of about 200 billion Japanese yen ($1.28 billion) for its initial public offering in Tokyo, Bloomberg reported. Goldman was up 0.6%.

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Asia Markets

Technology Leads US Equity Indexes Higher Amid Strong Payrolls Growth

US equity indexes traded mixed midday Friday as technology topped sector charts and nonfarm payrolls grew almost twice as fast as expected, and Washington struck Iran's oil tankers while awaiting its peace proposal.The Nasdaq jumped 1.5% to 26,191.5 after touching a record 26,192.09 intraday. The S&P 500 climbed 0.8% to 7,397.2 after hitting an all-time high of 7,400.09 earlier in the session. The Dow Jones Industrial Average edged up less than 0.1% to 49,638.2.After technology, which advanced 2.5%, consumer discretionary and materials were the second-biggest gainers. Healthcare led the decliners.Nonfarm payrolls rose by 115,000 last month, the Bureau of Labor Statistics said Friday, beating the 65,000 gain expected in a Bloomberg-compiled survey. The increase in March was revised up by 7,000 to 185,000, while the fall in February was adjusted to 156,000 from 133,000, the BLS said."Payrolls were volatile through (the first quarter), largely due to temporary factors like inclement weather and a healthcare strike in California," Thomas Feltmate, senior economist at TD Economics, said in a report. "With those effects now in the rearview mirror, April provided as the first 'clean' read on hiring for 2026 and the underlying details were reasonably constructive, despite the recent surge in energy prices."US consumer sentiment continued to fall in May, with the main sentiment index dropping to an all-time low of 48.2 from April's 49.8, according to the University of Michigan's preliminary survey on Friday. The print marked the third consecutive monthly retreat. Wall Street expected a 49.5 print, according to a Bloomberg-compiled poll.The year-ahead inflation outlook dropped to 4.5% this month from 4.7% in April, according to the Michigan survey. The current outlook is still above the 3.4% reading reported in February, before the start of the Iran war. The five-year inflation forecast fell to 3.4% from 3.5%.Most US Treasury yields fell, with the 10-year down three basis points to 4.36% and the two-year rate lower by 2.2 basis points to 3.90%.In Middle East news, the US expects a response from Iran on a proposal to end the war on Friday, Secretary of State Marco Rubio said, adding he hopes "it's a serious offer," CNN reported.Meanwhile, US forces disabled two Iranian-flagged unladen oil tankers on Friday that were attempting to dock at an Iranian port on the Gulf of Oman in violation of the US blockade, US Central Command said in a social media post on X, formerly Twitter. According to President Donald Trump, a ceasefire is still in effect, CNN reported.West Texas Intermediate crude oil futures rose 1.1% to $95.84, and Brent crude futures increased 1.3% to $101.32.In precious metals, gold futures advanced 0.4% to $4,730.1, and silver futures climbed 1% to $80.96.In company news, Akamai Technologies (AKAM) reported Q1 non-GAAP net income above market expectations as sales rose. Chief Executive Tom Leighton said a US-based entity committed $1.8 billion over seven years for the company's cloud infrastructure services. Shares of Akamai soared 22%, the top gainer on the S&P 500.Monster Beverage (MNST) offers "outsized" long-term growth potential after reporting "very strong" Q1 and April performance, Morgan Stanley said in a Friday note. Shares of Monster Beverage surged 15%, among the biggest outperformers on the S&P 500 and the Nasdaq.

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