June 29 (Reuters) - Canada's stock index futures inched up on Monday after Iran and the United States agreed to pause recent hostilities in the Middle East, though caution ahead of the USMCA review and weakness in precious metals weighed on sentiment.
Futures on the S&P/TSX index rose 3.40 points, or 0.16%, at 06:39 a.m. ET.
Iran and the United States agreed to renew talks regarding their dispute over the Strait of Hormuz, a U.S. official said on Sunday, raising hopes of saving an interim peace deal that was under pressure from days of tit-for-tat strikes.
Oil prices were steady, with Brent crude trading above $72 a barrel after sharp falls recently.
Gold prices slid more than 1% as easing geopolitical tensions dented its safe-haven appeal, while expectations of tighter U.S. monetary policy lifted the dollar.
A rally in commodity prices this year has helped push the resource-heavy S&P/TSX Composite index (.GSPTSE), to record highs. The index is on track for its eighth consecutive quarter of gains by end of the month.
Canadian officials are set to meet their Mexican and U.S. counterparts on Wednesday for the first trilateral meeting to review the U.S.-Canada-Mexico trade agreement. The three countries need to approve a renewal of their existing agreement or signal their intent to exit the pact.
U.S. President Donald Trump has said that the United States would do better without the USMCA on trade and that he would prefer not to have a new one.
Key domestic data this week include April GDP and S&P Global's June manufacturing activity survey. Meanwhile, traders expect the Bank of Canada to keep interest rates on hold through most of the year but see an about 30% chance of a 25-basis-point rate hike in December.
Investors will also closely watch for U.S. data, such as the June non-farm payrolls report and factory activity surveys, for cues on monetary policy outlook.
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Reporting by Sruthi Shankar in Bengaluru; Editing by Diti Pujara
