Today
U.S. and Canadian stock futures are pointing to a higher opening after falling yesterday as the lack of progress toward a U.S.-Iran peace deal pushed oil prices and bond yields higher. Oil and yields remain a central theme for markets, with the U.S. 10-year Treasury yield briefly climbing above 5.25% this morning before easing back to around 5.21% at the time of writing. Meanwhile, December Brent crude has slipped below $100 a barrel to around $98 after trading above $100 earlier this morning. In Canada, the latest GDP figures released this morning showed the economy was flat in July, in line with expectations, while year-over-year growth came in slightly above expectations at 1.4% vs 1.3%. Back in the oil market, Middle East exports are recovering despite continued disruption through the Strait of Hormuz. The U.S. Navy and Gulf producers have become more effective at moving tankers through and around the Strait, helping crude exports from Middle Eastern producers rebound to nearly 13 mln bpd in September, the highest since February, according to Kpler data. Iran, meanwhile, has been unable to move its own crude through Hormuz because of the U.S. maritime blockade. The improving flow of Gulf oil reduces Iran’s ability to use the Strait as leverage in negotiations, although it could also increase the risk of further escalation as Tehran looks for other ways to exert pressure.
Consumer confidence in Canada remains close to neutral as higher oil prices and the prospect of interest-rate increases weighed on sentiment. The Bloomberg Nanos Canadian Confidence Index edged up to 50.9 from 49.86 a week earlier but remained below its 51.8 reading at the beginning of the month. Canadians reported some improvements in their personal finances and job security, although expectations for the economy and real estate market weakened, with sentiment declining among people aged 50 to 59 and middle-income households. The cautious outlook comes amid growing inflation concerns at the BoC, where officials have warned that higher energy costs could create more price pressures leading economists to raise their inflation forecasts.
New bans start today. The U.S. has now officially imposed new import bans on some Canadian products, including motorcycles, alcohol, and whey, escalating trade tensions. The Trump administration introduced the restrictions in response to retaliatory Canadian tariffs that took effect earlier this month after trade negotiations collapsed over the summer. Although the latest bans impact only about $1 bln of trade (small when compared with the nearly $900 bln in goods and services exchanged between Canada and the U.S. last year), they add to broader restrictions. While the immediate economic impact may be relatively limited, continued escalation does pose a larger risk to business investment and supply chains. Trump has said he expects Canada to remove its tariffs and apologize, while the federal government has maintained that it will not rush into an unfavourable agreement. This also comes as Ottawa works to deepen trade relationships with Europe and Asia.
Japan is reassessing its dependence on oil from the Middle Eastern, potentially setting the stage for a shift in global crude trade flows. Japan imports 99.9% of its oil and sourced more than 90% of its crude from the Middle East in 2025, including 54% from Saudi Arabia and 32% from the UAE, leaving it very exposed to disruptions around the Strait of Hormuz. Tokyo is now considering policies to diversify suppliers and transportation routes, which could include formal import targets and government financial support, while South Korea has already committed to limiting any single region to 50% of its oil imports. The shift has already begun, with the U.S. supplying 37% of Japan’s petroleum imports in July, while additional barrels could come from the Americas and other non-Middle Eastern producers.
S&P 500 valuations have fallen as rising interest rates and concerns about the sustainability of AI-driven profits offset strong earnings growth. The index’s forward P/E ratio has declined from 22 times earnings to 19 times, back in line with its 10-year average, even as the S&P 500 has returned about 14% year to date. Higher Treasury yields have pressured valuations by increasing the discount rate applied to future corporate earnings, while investors are also questioning if heavy AI investment has pushed profits above sustainable levels relative to cash flows. Still, S&P 500 earnings are projected to grow 29.1% YoY, which would mark a third consecutive quarter of growth above 25%, with all 11 sectors expected to report higher profits.
Better get some headphones. Singapore is introducing tougher penalties for disruptive behaviour on public buses, including fines for passengers who play loud music or use speakerphones. Apparently, all those dirty looks at the speakerphone talker, video watcher, and nail clippers weren’t getting the message across. Offences such as loud audio, putting feet on seats, littering, or eating and drinking can result in fines of up to US$390. While some may think the punishment may not fit the crime, the new rules reflect the city’s emphasis on maintaining clean and orderly public spaces. Other cities are taking note, with London recently launching an etiquette campaign encouraging passengers to use headphones after about 70% of surveyed transit users said loud music or speakerphone conversations were disruptive. Taking notes, Canadian transit?
Diversion: Parents didn’t cheap out on the magician
