Launch Pad

Canada will ‘do its part’. Canada has committed to supporting the IEA’s coordinated release of 400 mln barrels of emergency oil reserves by asking domestic producers to draw down commercial inventories. While Canada does not maintain a strategic petroleum reserve given its status as a major oil exporter, companies do hold stockpiles that have been tapped during past supply disruptions, including after Russia’s invasion of Ukraine in 2022. Energy Minister Tim Hodgson said the Canadian government is also in discussions with oil sands producers about near term options to increase output, such as delaying planned maintenance or temporarily boosting production, though seasonal turnarounds are still expected to reduce second quarter output by roughly 150,000 bpd. Inventories in western Canada averaged about 23.3 mln barrels in March, up from roughly 17 mln a year earlier, providing some flexibility as global markets continue to adjust to supply disruptions tied to the near halt of flows through Hormuz. 

Already juggling a full slate of issues, the U.S. administration is turning back to trade. Trade rep Jamieson Greer announced an investigation into more than a dozen major economies, including China, the European Union, Mexico, India, Japan, South Korea and Taiwan, citing concerns over excess manufacturing capacity and unfair trade practices. The probe is the first step toward potential tariffs and part of the administration’s attempt to rebuild Trump’s tariff framework after the SCOTUS struck down his earlier global duties (because they were deemed illegal). While the investigations will likely take months, they could ultimately lead to new levies, adding another layer of tension to global trade relations ahead of a planned Trump–Xi summit and ongoing CUSMA negotiations. Canada, for now, avoided making the initial group of targeted countries. 

The entry of Chinese EVs into Canada has sparked concerns about jobs, trade and national security, echoing the same skepticism when Japanese automakers Toyota and Honda first entered the market in the late 1960s and 1970s. Initially criticized for threatening domestic manufacturing, Japanese brands eventually gained acceptance after investing in Canadian production, opening plants in Ontario in the 1980s and building large supplier networks that now support thousands of jobs and vehicle exports. Chinese EV makers could potentially follow a similar path by offering more affordable vehicles that help accelerate EV adoption, but today’s landscape is more complex because modern electric cars function as connected digital platforms, raising issues around cybersecurity, data governance, and supply chains. The key lesson from history is that foreign automakers tend to gain long-term acceptance only if they invest locally, create jobs, and align with Canada’s industrial and regulatory priorities. 

Inflation easing head fake? February’s inflation data showed underlying price pressures continuing to ease toward the Fed 2% target, even as the Iran war threatens to push headline inflation higher through rising energy costs. Core consumer prices, which exclude food and energy, rose 0.2% in February and 2.5% year over year, suggesting broader inflation pressures remain contained despite rising oil prices. Analysts say the recent jump in energy costs was not fully reflected in the report and could lift headline inflation in the coming months, though the pass-through to core inflation and economic growth is expected to be limited. Policymakers are therefore likely to keep interest rates steady for now while monitoring oil price volatility and its impact on the economy. Meanwhile, the Fed’s preferred inflation measure, the PCE index, due tomorrow, is expected to run closer to 3%. This would reinforce the view that while inflation is moderating, it remains above target and could delay potential rate cuts. 

Go Canada! Canada has advanced to the playoff stage for the first time in the World Baseball Classic with a win over Cuba yesterday. After 20 years and five previous attempts, Canada will play against the U.S. on Friday night in the quarterfinals. The all-star filled U.S. team had a scare during the round robin stage after losing handedly to Italy and then needing to cheer for Italy to beat Mexico yesterday to squeak into the second playoff spot in Pool B. Canada’s team is captained by Seattle Mariners slugger, Josh Naylor, and coached by Ernie Whitt, names that Blue Jays fans past and present know fairly well.    


Diversion: Wrong Table

Aluminum continued to rally and is at the highest level in nearly four years in London as the war in the Middle East dragged on, threatening deeper supply disruptions from local producers. Prices have surged since the start of the conflict in Iran, which has throttled supplies in the region, which accounts for about 9% of global output. A major smelter in Qatar has already cut production and others are facing disruptions to shipments of metal and raw materials as the Strait of Hormuz remains effectively shut. Commodity markets from energy to metals have been shaken up by the hostilities, with attacks proliferating across the region East as Tehran seeks to respond to waves of air strikes. Commercial marine traffic through Hormuz has all but halted, stressing supply chains and threatening a wave of inflation. Signs of a tightening market are emerging, with substantial orders to withdraw inventories from the LME’s warehouse network.