Global markets were mixed as hostilities in the Persian Gulf kept oil prices elevated, clouding an inflation outlook that should keep most central banks on pause at policy meetings this week.

As The Globe’s economic reporter Mark Rendell writes, the Bank of Canada is expected to hold interest rates steady this week while striking a more hawkish tone in its communications amid the surge in global oil prices that has reignited concerns about inflation. The U.S. Federal Reserve also makes its next rate decision on Wednesday.

Wall Street futures pointed higher after major North American markets closed down on Friday.

TSX futures were in the red.

On Wall Street, markets are watching earnings from Dollar Tree Inc.

“Central bank forecasts will immediately bias towards higher inflation and lower growth,” said Bruce Kasman, chief economist at JPMorgan. “Consistent with this view, we have pushed back or removed action for most central banks that were expected to ‌move in March and ​April.”

“Developments on the ground highlight the potential ‌for further price increases and the likelihood that the risk premium will remain elevated.”

Overseas, the pan-European STOXX 600 was down 0.37 per cent in morning trading. Britain’s FTSE 100 edged up 0.02 per cent, Germany’s DAX declined 0.35 per cent and France’s CAC 40 slid 0.57 per cent.

In Asia, Japan’s Nikkei closed 0.13 per cent lower, while Hong Kong’s Hang Seng gained 1.45 per cent.

Oil prices rose as the U.S.-Israeli ⁠war on ​Iran continued to disrupt oil production and shipping in the Middle East, despite U.S. President Donald Trump’s call for global efforts to secure the vital Strait of Hormuz.

Brent crude futures climbed 2.2 per cent to US$105.44 a barrel. West ⁠Texas Intermediate ​(WTI) crude gained 1.3 per cent to US$100 a barrel.

“U.S. strikes over ‌the weekend on Kharg Island raised supply concerns, as most of Iran’s oil exports pass through it,” ING commodity strategists said.

In other commodities, spot gold fell 0.7 per cent to US$4,983.17 an ounce. U.S. gold futures for April delivery ​dropped 1. per cent to US$4,987.30.

The Canadian dollar strengthened against its U.S. counterpart.

The day range on the loonie was 72.83 US cents to 73.02 US cents in early trading. The Canadian dollar was down about 0.45 per cent against the greenback over the past month.

The U.S. dollar index, which weighs the greenback against a group of currencies, slid 0.14 per cent to 100.23.

The euro climbed 0.39 per cent to US$1.1463. The British pound rose 0.23 per cent to US$1.3256.

In bonds, the yield on the U.S. 10-year note was last down at 4.261 per cent.

China’s retail sales, industrial production and fixed asset investment

8:15 a.m. ET: Canadian housing starts for February. The analyst estimate is a rise of 9.2 per cent on an annualized rate basis.

8:30 a.m. ET: Canadian CPI for February. The Street expects a gain of 0.6 per cent month-over-month and 1.9 per cent year-over-year.

8:30 a.m. ET: Canada’s national balance sheet and financial flow accounts for Q4.

8:30 a.m. ET: Canada’s new motor vehicle sales for January. Estimate is a month-over-month decline of 0.3 per cent.

9:15 a.m. ET: U.S. industrial production for February. Consensus is a gain of 0.1 per cent from January with capacity utilization remaining 76.2 per cent.

10 a.m. ET: U.S. NAHB Housing Market Index for March.

With Reuters and The Canadian Press