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Canada's Vulnerability Stands Out Among Trade Partners Amid U.S. Tariffs, Says RBC

Despite the unprecedented scope of the United States tariffs, major economies weathered the trade shock in 2025, but with significant distributional shifts under the surface, said RBC.U.S. imports reoriented rapidly away from higher-tariffed regions like China, but still rose overall in 2025 as American consumers, businesses, and governments continued to spend, noted the bank. Almost 90% of global trade that doesn't involve the U.S. continued to grow.Distributional impact has been concentrated, stated RBC. Headline gross domestic product in Canada held up better than feared, while specific sectors -- steel exports were down 30%, motor vehicles, aluminum -- and regions, such as Ontario and Quebec with an over 6% effective tariff rates, have been hard hit.Canada's heavily integrated cross-border supply chains are a challenge that most offshore U.S. trade partners don't face, pointed out the bank. Canada's share of the U.S. import market declined in 2025 despite almost 90% of exports remaining tariff-free.The world can absorb U.S. trade shocks, while Canada cannot as easily, according to RBC. The year marked global resilience to trade policy uncertainty, and the U.S. share of Canada's exports declined. But, it is still high at 71.6%, leaving Canada fundamentally more exposed than most other trade partners.

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Commerzbank on Overnight News

Commerzbank in its "European Sunrise" note of Thursday highlighted:Markets: United States Treasuries weaken in late New York session, turn sideways in Asia. E-minis little changed, Asian equities mixed. The US dollar (USD) trades stronger. The euro (EUR) at US$1.167. Brent recovers to $97/barrel.Fed: Minutes show that the vast majority thought inflation progress could be slower, while it viewed employment risks as skewed to the downside. "Many" said higher-for-longer inflation could call for hikes, while "most" judged protracted Iran war could hit job market and warrant cuts and "some" saw "strong case" for two-sided language on rate path.Fed: San Francisco Federal Reserve Bank President Mary Daly calls the economy "remarkably resilient," says it's too early to know the economic consequences of the Iran war.Fed economist Chris Phelan is said to be the front-runner for President Donald Trump's economic adviser role (Politico sources).Iran plans to restrict traffic through the Strait of Hormuz and to charge tolls (WSJ). White House reiterates it wants no limitations at Hormuz, including tolls, says Lebanon isn't part of the ceasefire. Vice President JD Vance says there won't be any sanctions relief if Iran develops nuclear weapons, sees signs that Hormuz is starting to reopen, Israel offered to restrain strikes during talks.Iran: Parliament speaker Mohammad Bagher Ghalibaf says ceasefire deal with the U.S. was violated, the Islamic Revolutionary Guard Corps (IRGC) says it's preparing "heavy" response to attack on Lebanon (Mehr). Iran designates routes for safe passage through the Strait of Hormuz (Nour).Iran/Israel: Prime Minister Benjamin Netanyahu says this isn't the war's end. He insisted that the ceasefire wouldn't include Hezbollah.NATO: President Trump says NATO "won't be there if we need them again." Trump weighs punishing certain countries over Iran support, including moving troops out of some states and potential closure of at least one base (WSJ sources). NATO Secretary-General Mark Rutte says his meeting with Trump was a discussion among "good friends."Venezuela: The U.S. weighs lifting central bank sanctions to unlock oil.==EUROPE:EU: European Commission Executive Vice President Valdis Dombrovskis says the European Union will be hit by "stagflationary shock" (FT).France: Budget Minister David Amiel says the government is sticking to the 2026 deficit target of 5%, could beat it depending on the economy.

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US Markets23d ago

Equities Mark Best Finish in At Least 4 Weeks Following US-Iran Truce

Equities on Wall Street rallied Wednesday, driving key indexes to their highest close in at least four weeks, as oil prices slid following a two-week ceasefire between the US and Iran.The Dow Jones Industrial Average increased 2.9% to 47,909.9, the highest close since March 5, while the Nasdaq Composite jumped 2.8% to 22,635, its best finish since March 11.The S&P 500 advanced 2.5% to 6,782.8, marking the highest closing level since March 9.Barring energy's 3.7% decline, all sectors ended in the green, led by industrials' 3.8% advance.West Texas Intermediate crude oil was last down nearly 15% at $96.44 a barrel, while Brent futures tumbled about 12% to $96.40 -- though both benchmarks remained well above pre-conflict levels.US President Donald Trump, who had set an 8 pm ET, Tuesday, deadline for Tehran to fully reopen the Strait of Hormuz, agreed to suspend planned attacks on Iran for two weeks upon Pakistan's request. Tehran said it would allow "safe passage" through the key trading route, subject to coordination with Iranian authorities.However, reports about ceasefire violations signified the possible fragile nature of the pact.Iran's parliamentary speaker, Mohammad Bagher Ghalibaf, accused the US of violating the ceasefire agreement.The White House said Iran assured that ships are transiting the Strait of Hormuz, despite reports that Tehran had again closed the waterway because of Israel's attacks on Lebanon, CNN reported.Separately, Kuwait and the United Arab Emirates reportedly said they were targeted with Iranian drones and missiles."The headlines may calm down first, but the real reset depends on what happens in the days ahead," Charu Chanana, chief investment strategist at Saxo Bank, said in a report.US Treasury yields were down, with the 10-year rate falling 5 basis points at 4.3% and the two-year rate dropping 4.1 basis points at 3.79%.Minutes from the Federal Reserve's March meeting showed that participants emphasized the need for the central bank to be "nimble" in adjusting monetary policy amid heightened macro risks."The vast majority of participants judged that upside risks to inflation and downside risks to employment were elevated, and the majority of participants noted that these risks had increased with developments in the Middle East," the minutes showed.Most policymakers were concerned that a prolonged war could soften labor market conditions, possibly warranting policy easing, according to the minutes. However, persistent inflation amid higher oil prices could call for rate increases."The conflicting viewpoints point to a period of policy stability," Sal Guatieri, senior economist at BMO Capital Markets, said in a report. "The Fed is on hold until it has greater clarity on the direction of the Iran war and its effects on the economy and inflation."Airline and cruise operator stocks jumped, with Carnival (CCL) up 11%, among the top gainers on the S&P 500. United Airlines (UAL) surged 7.8%. Southwest Airlines (LUV) and American Airlines (AAL) were also up, along with Norwegian Cruise Line (NCLH) and Royal Caribbean Cruises (RCL).In company news, Meta Platforms (META) shares jumped 6.5% after the tech giant unveiled its Muse Spark artificial intelligence model.Delta Air Lines (DAL) logged better-than-expected first-quarter results amid robust corporate and leisure demand. The air carrier's shares rose 3.8%.Exxon Mobil (XOM) expects its global oil-equivalent output to take a hit in the first quarter due to production disruptions caused by the Middle East conflict. Shares of the US oil giant fell 4.7%, while smaller rival Chevron (CVX) slumped 4.3%, the steepest decline on the Dow.Gold was last up 1.4% at $4,750.70 per troy ounce, while silver gained 3.4% to $74.44 per ounce.

$^DJI$^IXIC$^SPX$AAL$CCL$CVX$DAL$LUV$META$NCLH$RCL$UAL$XOM

US Markets23d ago

Fed Should be 'Nimble' Amid War-Driven Macro Risks, March Meeting Minutes Show

The Federal Reserve should be "nimble" in adjusting monetary policy in light of heightened risks to inflation and employment driven by the Middle East conflict, minutes from the central bank's March 17-18 meeting showed Wednesday.At the meeting, the Federal Open Market Committee decided to keep its policy rate unchanged between 3.50% and 3.75% for a second straight time amid uncertainty around the US-Israel war with Iran. The FOMC's Summary of Economic Projections at the time continued to indicate potential policy easing this year."In light of the heightened degree of economic uncertainty, participants emphasized the importance of being nimble in adjusting the stance of policy in response to incoming data, the evolving outlook, and the balance of risks," the meeting minutes showed Wednesday. "Many participants judged that, in time, it would likely become appropriate to lower the target range for the federal funds rate if inflation were to decline in line with their expectations."A couple of policymakers pushed their expected timing of potential policy easing "further into the future," according to the document."The vast majority of participants judged that upside risks to inflation and downside risks to employment were elevated, and the majority of participants noted that these risks had increased with developments in the Middle East," the minutes showed.On Tuesday, the US and Iran agreed to a two-week ceasefire. The war, which began at the end of February, spread across the Middle East and curtailed shipments through the crucial Strait of Hormuz, driving up energy prices.West Texas Intermediate crude oil sank nearly 15% to $96.34 a barrel intraday, while Brent futures tumbled 12% to $96.55. Despite the declines, oil prices remained well above pre-war levels."Our baseline view is that as the (energy price) shock gradually fades, so too will inflation pressures," TD Economics Senior Economist Andrew Hencic said in a note Wednesday. "This may open the door for the Fed to normalize rates in the latter half of the year."Most policymakers were concerned that a prolonged war could soften labor market conditions, possibly warranting additional policy easing, the meeting minutes showed Wednesday.Earlier this month, official data showed that the economy added more jobs than expected in March, while the unemployment rate edged down to 4.3% from 4.4% sequentially."Many participants pointed to the risk of inflation remaining elevated for longer than expected amid a persistent increase in oil prices, which could call for rate increases to help bring inflation down to the committee's 2% objective and keep longer-term inflation expectations firmly anchored," according to the latest meeting minutes. "Participants anticipated that, under appropriate monetary policy, inflation would gradually move down toward the committee's 2% objective after the effect of increased tariffs and higher oil prices had faded."Markets widely expect the FOMC to keep interest rates unchanged later this month, according to the CME FedWatch tool.

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Canada's Vulnerability Stands Out Among Trade Partners Amid U.S. Tariffs, Says RBC

Commerzbank on Overnight News

Canada's Vulnerability Stands Out Among Trade Partners Amid U.S. Tariffs, Says RBC

Commerzbank on Overnight News

Malaysian Shares Ended Lower, Mirroring Regional Losses; M N C Wireless' Shares Plunge 23%

US 10-Year Treasury Yield Falls to 4.29% Pre-Bell; 2-Year Rate Leans Lower to 3.79%

US Treasury Yields Mixed Ahead of Fed's Preferred Inflation Data as Lebanon Pounding Risks Iran Truce

European Council Calls for Swift Progress to Lasting US-Iran Peace, Protect Civilians, Restore Energy Normalcy

Singapore Shares Retreat, Track Regional Losses as Markets Asses Fragile US-Iran Ceasefire

Strait of Hormuz Flow to Remain Constrained for Weeks Despite Ceasefire, Says Sparta

Hong Kong Stocks Fall As US-Iran Ceasefire On Thin Ice; Two Firms File For IPO

Malaysian Industrial Production Mixed in March

EMEA Natural Gas Update: Futures Rise Over 2% as Middle East Ceasefire Turns Fragile

Libya's Ghadames Basin Yields New Gas, Condensate Discovery

South Korean Shares Close Lower amid Israel's Beirut Attack, US-Iran Ceasefire Under Strain

RBC Capital Markets Raises Commodity Price Outlook for 2026-28

RBC Lifts Oil, Gas Forecasts Amid Enormous Middle East Supply Shock

EMEA Oil Update: Prices Bounce as Middle East Truce Hopes Fade

Equities Mark Best Finish in At Least 4 Weeks Following US-Iran Truce

Wealth Brokers, Investment Banks Faced Uneven First-Quarter Activity, UBS Says

Fed Should be 'Nimble' Amid War-Driven Macro Risks, March Meeting Minutes Show

US Treasury Closing Levels