Good morning. Markets are running out of patience, economic reports are only just beginning to show the effects of rising oil prices, and Allied Gold shareholders are voting on a proposed takeover by a Chinese mining company. Those stories are in focus this week – plus, how the Blue Jays are hoping to have all their angles covered.
Up first
In the news
Trade: Finance Minister François-Philippe Champagne is leading a trade-diversification mission to China this week, expanding on Prime Minister Mark Carney’s recent trip to reset strained bilateral ties.
Climate: Battle lines are being drawn as Ottawa crafts new regulations that will tackle road pollution by Canadian drivers – and go some distance toward shaping the country’s automotive market for the next decade.
Travel: Private technology firm Hopper Inc. is set to announce today that it has signed a long-term deal to power the travel program for Royal Bank of Canada’s Avion Rewards Visa card members.
An Israeli police officer surveys the aftermath of an Iranian ballistic missile attack yesterday.Amir Levy/Getty Images
In focus
‘No place to hide’
For markets, a matter of time: Iranian-backed Houthi forces entered the Middle East conflict on the weekend, launching missiles toward Israel and raising the risk of renewed attacks on commercial shipping through the Red Sea.
The move adds pressure to an already strained energy and trade system, as Iran continues to restrict traffic through the Strait of Hormuz and U.S. forces expand their presence in the region. Regional powers are set to meet for talks, while Washington has given Iran until April 6 to reopen the strait.
Markets aren’t offering many safe options as the war hits almost every corner of the financial system. Oil has climbed above US$100 a barrel, pushing up borrowing costs and inflation expectations, while stocks have fallen across regions, with sharper drops in Asia and more modest losses in the United States.
Assets that usually provide shelter aren’t helping: Gold is down sharply, government bonds are selling off, and currencies like the yen are weakening, leaving the U.S. dollar as the main place investors are parking money as volatility spills into credit markets and dealmaking.
“Since the war broke out, we’ve reduced equities because there’s no place to hide,” said Rajeev De Mello, chief investment officer at Singapore-based GAMA Asset Management.
While markets have fallen, worries about missing a turning point in the war have tempered the selloff. This month’s drop is less than half of that prompted by the tariff proposals last spring. Even after four weeks of war, the S&P 500 is just 6 per cent below its last record high, notched in January.
But investors’ patience will be put to the test after U.S. officials said the war will last at least another month. And that might be on the optimistic side of possible outcomes. In a speech last week to oil-industry executives, former U.S. defence secretary James Mattis said a sustained easing of the conflict would require a halt to attacks on energy infrastructure, reduced risk to shipping through the Strait of Hormuz, and an arrangement to which both the United States and Israel adhere.
If the U.S. were to declare victory and turn more aggressively toward an off-ramp, Iran would now say “they own the strait,” Mattis said. “You’d see a tax for every ship that goes through.”
“We’re in a tough spot, ladies and gentlemen. I can’t identify a lot of options.”
Before and after: Last spring, as U.S. President Donald Trump’s tariff plans lurched from threat to delay to partial retreat, companies stopped pretending they could see through the fog.
Automakers, airlines and technology companies suspended or softened guidance rather than offer forecasts built on trade rules that might change by the week. Tariffs, however and whenever they landed, made offering any guidance a bit of a coin toss.
Nearly a year later, business and policy leaders – anyone watching the market, for that matter – find themselves again straddling two distinct eras. It’s not as if the world was on the brink of economic utopia before the U.S. and Israel attacked Iran in late February, but many countries entered the year hoping a prolonged period of slow growth might finally find a higher gear in the latter half of 2026.
In their lending-rate decisions earlier this month, both Bank of Canada Governor Tiff Macklem and U.S. Federal Reserve Chair Jerome Powell were among a string of central bankers saying higher energy prices will push up inflation in the near term. But no one knows the “scope and duration of the potential effects” of the war on the economy, Powell said.
On Wednesday, market watchers will be parsing the Bank of Canada’s summary of deliberations from its March meeting for signs of how concerned the governing council is over the energy shock feeding into prices of broader goods and services. Anticipating the bank’s next moves have created a split between money markets, which have priced in hikes – and economists, who argue the country’s soft economic growth and foundering labour market aren’t exactly unleashing a rush of spending.
Late expectations: Statistics Canada’s monthly gross domestic product report tomorrow, for example, is expected to show the economy likely stalled in January, owing largely to longer-than-expected auto plant shutdowns. Harsh weather also slowed housing activity, but gains in energy production and a rise in retail sales point to continued resilience in household spending, RBC economists Claire Fan and Abbey Xu wrote.
Early numbers point toward a partial rebound in February as auto production resumed, and RBC expects first-quarter growth to remain modest overall.
On Thursday, Canada’s trade deficit is projected to narrow on stronger auto exports and higher oil prices.
The U.S. jobs report on Friday will headline a week of data that includes readings on manufacturing, services and retail sales, though much of it will reflect pre-shock conditions. March payrolls are expected to show modest gains of around 50,000 jobs after February’s decline – a figure that still largely reflects hiring decisions made before higher energy prices took hold. Surveys like the Institute for Supply Management report may begin to show rising input costs, economists say, but it will take time before the impact of those prices shows up more clearly in hiring and spending plans.
A golden opportunity? Allied Gold shareholders were expected to vote tomorrow on a proposed $5.5-billion sale to Zijin Gold International Company Limited, a deal that will test Ottawa’s stand on Chinese investment as Canada recalibrates trade ties.
The board has unanimously recommended the agreement, arguing it delivers immediate value and reduces exposure to market volatility and development risks.
Ottawa tightened restrictions on Chinese investment under then-prime-minister Justin Trudeau, while Prime Minister Mark Carney has moved to attract more capital from China as Canada looks to reduce reliance on the U.S. – a shift that prompted U.S. President Donald Trump to threaten tariffs if Canada deepens economic ties with Beijing.
Peter Marrone, the company’s chief executive, said he expects the deal to close in April, though it will face a federal net-benefit review.
Also on our radar
Euro area economic and consumer confidence data will show how hard tariffs and the Iran war are biting into the global economic outlook.
- Powell, who has one more rate decision left as Federal Reserve chair, is set to address students at Harvard University today on the Principles of Economics.
- Goeasy, a Canadian lender that provides loans to borrowers who can’t access traditional bank credit, is poised to report earnings tomorrow after warning of more than $200-million in losses tied to its auto and powersports lending business, Amber Kanwar writes in her market setup.
- Nike, meanwhile, just can’t. After advising consumers to just do it all these years, the shoemaker and athletic apparel giant reports tomorrow with its stock at an 8½-year low and profits expected to drop sharply from last year.
Charted
The better angles of their nature
How two pitchers arrive at radically different release points
The Globe and Mail
Tyler Rogers, the Toronto Blue Jays’ new right-handed submarine relief pitcher, has the lowest release point in the majors. Imagine facing that near-underhanded delivery of bat-shattering sinkers after starting off the game against Trey Yesavage, who throws like a converted cricket bowler. My Globe colleagues have put together a cool visual explainer on the 2026 team’s arsenal of arms.
Quoted
It’s funny when people think you have to be an actor or you have to be a renovation host, because we’re all layered people. Before we got into real estate, I wanted to be an actor and director. Jonathan wanted to be a magician.
— Drew Scott
The Property Brothers rebuke Reddit haters and explain how to do reality renos in a housing crisis.
Morning update
Global markets were mixed in cautious trading amid concerns the Middle East conflict could bring a spike in inflation and the risk of recession to much of the globe.
Wall Street futures were in positive territory after major U.S. markets closed sharply lower on Friday. TSX futures followed sentiment higher as commodity prices climbed.
Overseas, the pan-European STOXX 600 was up 0.15 per cent in morning trading. Britain’s FTSE 100 rose 0.62 per cent, Germany’s DAX slipped 0.17 per cent and France’s CAC 40 was little changed.
In Asia, Japan’s Nikkei closed 2.79 per cent lower, while Hong Kong’s Hang Seng declined 0.81 per cent to a one-year low.
The Canadian dollar traded at 71.88 U.S. cents.