Launch Pad

Ultimatum. Ahead of his latest deadline, Trump made reopening the Strait of Hormuz a central condition of any deal with Iran, while maintaining threats to strike critical infrastructure, including bridges and power plants, if terms are not met. The messaging continues to blend negotiation with coercion, with Trump signalling progress in talks while escalating the tone of his threats. Iran has rejected interim ceasefire terms, calling instead for a permanent end to the war, compensation, and sanctions relief, while warning it would retaliate against any strikes on civilian infrastructure. The standoff is keeping pressure on global energy markets, with concerns that further disruption through Hormuz could deepen the supply shock and weigh on the global economy. 

Spring effect. The S&P 500 has historically seen a seasonal lift in April, with patterns pointing to stronger returns, particularly in the second half of the month, partly driven by retail investors returning to markets after the tax filing deadline. Since 1990, April has averaged a 1.5% gain, with additional support coming from tax refunds being reinvested and investors potentially deploying fresh capital. This year, that dynamic could help stabilize markets following recent volatility tied to the Iran conflict, which pushed some stocks into a correction territory earlier in the quarter. With some investors already de-risked, analysts have noted that the potential for further heavy selling may be limited. 

Canadian consumer confidence fell to an 11-month low as the Iran conflict and rising energy prices weigh on sentiment. The Bloomberg Nanos index dropped below 50 to 46.93, signalling net negative views, with only 15% of Canadians expecting the economy to improve over the next six months, quite the drop when you consider it was 27% just weeks ago. Concerns about inflation, job losses, and trade uncertainty tied to Trump’s policies are contributing to the downturn. While higher oil prices may benefit Canada’s energy sector, they are also squeezing households and dampening spending. Adding to that, the Bank of Canada has warned of weaker near-term growth alongside rising inflation risks. 

Service-sector growth in the U.S. slowed in March, highlighting mounting stagflation risks in the economy. The Institute for Supply Management services index declined to 54, reflecting weaker business activity and a sharp drop in employment, while the prices-paid gauge jumped to its highest level since 2022. Businesses reported significant increases in fuel and input costs due to the Iran conflict, which has disrupted supply chains and pushed energy prices higher. The employment component fell as well, suggesting companies are becoming more cautious amid rising uncertainty about the economic outlook. Despite continued expansion in most service industries, the combination of slowing growth and rising costs is raising concerns about underlying economic momentum. 

Beyond Apollo. Artemis II reached a historic milestone, with its crew traveling farther from Earth than any humans before, surpassing the distance set by the Apollo 13 astronauts in 1970. The four-person crew, including Canadian astronaut Jeremy Hansen, is on a lunar flyby that will bring them closer to the Moon than any human mission in more than 50 years. The mission serves as a critical test of spacecraft systems ahead of future lunar landings, while also allowing astronauts to observe and photograph the Moon’s far side. At its closest approach, the crew will come within about 4,070 miles of the lunar surface and experience a temporary communications blackout as they pass behind it. 


Diversion: I used to play this game on my phone  
 

China has stepped up its gold buying as prices weakened, with the People’s Bank of China adding about 5 tons in March, its largest increase in over a year and extending a 17-month buying streak. The move comes as gold prices fell roughly 12% during the month, pressured by a stronger U.S. dollar and expectations that the Fed will keep interest rates higher for longer due to inflation risks tied to the Iran conflict. Despite the decline, central bank buying remains a key source of support for gold, especially among emerging markets seeking to diversify away from dollar-based assets. Experts are noting that China’s continued accumulation may help stabilize investor confidence in bullion after recent volatility. 

Central banks are facing a difficult dilemma as the Middle East energy shock drives oil prices higher and raises global inflation risks, challenging the traditional approach of simply looking through temporary supply shocks. While some have urged central banks to remain patient, policymakers at the Fed, BoC, ECB, and BOE appear more and more cautious about ignoring the impact. Repeated shocks, from the pandemic to the Ukraine war and now the Iran conflict, have raised concerns that inflation expectations may no longer be well anchored, increasing the risk of persistent price pressures. At the same time, interest rates are already relatively high, limiting how aggressively policymakers can respond without harming growth. While officials are leaning towards a wait-and-see approach, they also risk acting too slowing, something that could prove very costly.