Stock futures are mixed this morning, with some indexes getting a tentative lift from reports of a potential 45-day ceasefire under discussion between the U.S., Iran, and regional mediators, even as the probability of a near-term deal remains low. The proposed framework would begin with a temporary truce, creating a window for negotiations toward a broader agreement to end the conflict, though sources suggest the chances of reaching even a partial deal in the coming days are slim. For now, the talks are being viewed as a last-ditch effort to avoid a more severe escalation involving strikes on critical infrastructure and retaliation across the region. That said, the tone on the ground remains far more confrontational, with recent developments highlighting how wide the gap still is between both sides. Trump reinforced that tension with a message posted on Easter Sunday stating, “Open the f****** Strait… or you’ll be living in hell — just watch,” language we quote directly to preserve the tone.
Trump turned up the heat over the weekend by threatening to target Iran’s power infrastructure, issuing ultimatums tied to reopening the Strait of Hormuz. Iran rejected the demands, insisting the waterway would only reopen once war damages are compensated. The conflict has severely cut shipping through Hormuz, driving energy prices higher and pushing national U.S. average gasoline above $4 per gallon. Attacks on energy infrastructure in Kuwait and the UAE, is also escalating risks to supply and broader economic stability. Despite signals that the U.S. may be looking for an offramp, both sides appear far apart on settling conditions for ending the war. At the margin, traffic through the Strait of Hormuz is picking up modestly as countries negotiate safe-passage agreements with Iran. About 21 ships transited over the weekend, still well below the roughly 135 daily vessels seen before the war, highlighting both progress and ongoing disruption. Iran continues to flex their strength over the waterway, granting selective access to Iraq and India while maintaining leverage over global energy flows. The terms of these arrangements remain unclear, and passage remains dependent on Iran’s discretion, leaving the situation fragile.
Canada is looking to deepen its financial services footprint in China as it looks to diversify trade away from the U.S. and boost exports to its second-largest trading partner. A senior delegation, including Finance Minister François-Philippe Champagne and the BoC Canada governor, met with Chinese officials to advance discussions, with a focus on expanding banking and insurance capabilities to support Canadian exporters. The initiative is tied to Ottawa’s goal of increasing exports by 50% by 2030, with policymakers emphasizing that greater financial services access is key to facilitating trade. Discussions also touched on existing trade frictions, including tariffs on Canadian pork and low-priced Chinese imports, while both sides look to establish a more formal channel to address ongoing issues within a roughly $120 billion trading relationship.
Faceoff. Staying on China, Trump is set to meet Xi Jinping in May during his first visit to China in eight years, as both sides attempt to manage a volatile trade relationship shaped by tariffs and geopolitical tensions. The dynamic has shifted from aggressive tariff escalation to cautious engagement, with multiple rounds of talks and a temporary truce aimed at stabilizing trade flows. Despite ongoing negotiations, everything isn’t peachy, with both sides continuing to deploy tariffs, export controls, and restrictions on key industries such as semiconductors and rare earths. China has adapted by redirecting trade toward other regions, while the U.S. has maintained pressure through policy tools and investigations. The planned summit, delayed by the Iran conflict, comes at a critical moment as both economies navigate broader global uncertainty and race to increase their influence on the global stage.
European blue-chip companies are expected to return to earnings growth in Q1, with profits forecast to rise about 4% after a previous decline, largely driven by a rise in energy prices tied to the Middle East conflict. The STOXX 600 is seeing strong support from energy firms, whose earnings are projected to jump nearly 25%, while other sectors are expected to post only modest gains. Revenue growth is more subdued at around 1.7%, continuing a trend where cost-cutting and restructuring have boosted profits more than top-line expansion. Earnings expectations have improved significantly in recent months, rising from less than 1% growth earlier in the year as oil prices climbed. However, investors remain cautious due to uncertainty around the broader economic impact of the conflict.
Inflation in the U.S. is expected to increase in March, with economists forecasting a 1% monthly increase in the consumer price index, the largest gain since 2022, driven primarily by rising gasoline prices tied to the Iran conflict. Core inflation, which excludes food and energy, is projected to rise more modestly at 0.3%. The data, along with steady labour market conditions, suggests the Fed may face difficulty cutting interest rates in the near term. Additional releases, including the Fed’s preferred inflation gauge and consumer sentiment data, will help clarify whether price pressures are becoming more entrenched. This problem isn’t unique to the U.S. with central banks globally expected to remain cautious, with many opting to hold rates steady as they assess the inflationary impact of the conflict.
No snow, no show. A historically warm winter and record-low snowfall across the western U.S. forced widespread ski resort closures, with more than half shutting early or never even opening. Resorts from New Mexico to Utah and Colorado have struggled to stay operational, in some cases bulldozing snow onto runs, while visitor traffic and local business activity have dropped. Scientists have noted that snowpack levels are among the lowest on record and temperatures have run 20–30°F above normal, breaking hundreds of records. The poor season is raising concerns about the long-term viability of the $20 billion ski industry and its roughly 190,000 jobs in the U.S. Beyond tourism, the lack of snow is increasing wildfire risks and threatening water supplies for major cities that rely on Colorado River runoff.
Diversion: Better safe than sorry
