Launch Pad

The U.S.-Israeli war on Iran has entered its fourth day with escalating regional strikes with no clear timeline for de-escalation, as Trump said the campaign could last longer than initially projected. Iran launched missiles at Qatar, Bahrain and Oman, countries hosting U.S. bases, which has threatened shipping through the Strait of Hormuz. The death toll has continued to climb after Israel struck leadership and security targets in Tehran and expanded operations into southern Lebanon. Energy markets have reacted, with Brent crude spiking above $85 and European gas prices jumping as infrastructure disruptions climbed, including shutdowns at QatarEnergy facilities and fires near key UAE oil hubs. Officials in the U.S. signaled the operation would intensify, even as Gulf states quietly push for an off-ramp amid widening security risks. 

European blue-chip earnings have held up better than feared in Q4, with year-on-year profits for STOXX 600 companies now expected to dip just 0.1%, a big improvement from the 4% decline analysts projected a month ago. Of the 201 companies that have reported so far, 57% beat expectations, though the season still appears set to be the weakest in the past eight quarters. Revenues are forecast to fall 2%, continuing a trend of lagging profit performance in recent quarters. Earlier downgrades had followed U.S. tariff announcements under Trump, and while a Supreme Court ruling struck down most of those tariffs, a new 10% blanket tariff remains in place, prompting businesses to reassess strategies and supply chains. The outlook is further clouded by escalating Middle East conflict, which could drive oil prices and inflation higher, adding fresh pressure to companies in Europe. 

BoC officials have signaled that supply-driven inflation shocks may require policy restraint, even if economic growth is weak, underscoring the limits of rate cuts. Deputy Governor Sharon Kozicki said that when inflation pressures from supply shocks are large and persistent, the central bank may need to hold rates steady, cut less aggressively than in a demand-driven downturn, or even raise rates to prevent inflation expectations from becoming unanchored. While smaller or short-lived shocks can be ignored, broader cost pressures such as those stemming from tariffs, geopolitics, aging demographics, or extreme weather may lead to tightening despite economic softness. The BoC, which has kept its policy rate at 2.25% and sees inflation near its 2% target, emphasized that its flexible inflation-targeting framework provides room to navigate these scenarios, but warned that failing to respond to persistent inflation risks could ultimately require even more aggressive action and lead to a weaker economy down the line. 

At the annual PDAC mining conference in Toronto, critical minerals dominated discussions as government and industry leaders stressed the urgency of securing supplies of copper, nickel, lithium, and other key metals amid rising geopolitical tensions and trade uncertainty. Officials pointed to supply-chain vulnerabilities and growing need for faster permitting and project development, with Ontario Premier Doug Ford accelerating plans for a road into the Ring of Fire to 2030, five years ahead of schedule. Germany and Quebec strengthened ties through a joint declaration and four corporate agreements to bolster supply chains for EV, defense and renewable energy materials, while Mark Carney and India’s Narendra Modi pledged deeper co-operation on critical minerals value chains. At the same time, a new report warned Canada faces funding shortfalls due to limited domestic capital and past foreign takeovers of major mining assets, arguing Ottawa’s $2-billion Critical Minerals Sovereign Fund lacks scale and calling for expanded sovereign investment, infrastructure spending, and closer alignment with U.S. supply chains. 

There is a widening divide amongst U.S. consumers, with the K-shaped economy now appearing to impact the fitness world. Recent earnings reports showed both Life Time and Planet Fitness posting strong double-digit revenue growth and rising memberships, but their results underscore a difference in consumers. Life Time, which caters to higher-income members with premium amenities, raised dues by $10 to $30 and still saw engagement and in-center spending climb, with average revenue per membership up nearly 11%, signaling affluent consumers remain willing to pay for lifestyle and wellness experiences despite broader economic pressures. Planet Fitness also added 1.1 million members and grew revenue, but its softer 2026 outlook and slightly higher cancellations raised concerns about demand among more price-sensitive customers. The results reflect another example of a K-shaped economy where higher-income households continue spending freely, while lower- and middle-income consumers show more caution, something that is becoming more and more visible across industries beyond fitness. 

Guess this is the world we live in now. Wagers on geopolitical events rose to record levels on prediction markets as the U.S.-Israeli strikes on Iran intensified, with bettors placing $425 million on geopolitics-related contracts on Polymarket last week, more than doubling the prior week and helping push total platform volume to a record $2.4 billion. Iran-linked bets dominated activity, including heavily traded contracts on the timing of U.S. strikes and on whether Ayatollah Ali Khamenei would be out as supreme leader by Feb. 28, a market that drew $84 million in weekly volume before his death. The spike has fueled scrutiny from analysts who flagged suspicious trading patterns suggestive of potential advance knowledge, while U.S. lawmakers have urged platforms to crack down on contracts tied to war and assassination. Although U.S. regulations for the most part bar these types of  contracts, Polymarket operates offshore outside of U.S. oversight, unlike regulated platform Kalshi, which lists fewer geopolitics markets and includes restrictions on how certain outcomes are settled. 

Gas prices are also pushing higher as Qatar shut LNG production at the world’s largest export facility after it was targeted in an Iranian drone attack, sending European gas prices surging as much as 54%. QatarEnergy’s Ras Laffan plant covers about a fifth of global LNG supply, and the  unprecedented halt now threatens energy security and spooked global markets. Europe’s benchmark gas futures jumped by the most since the 2022 crisis caused by Russia’s invasion of Ukraine. LNG shipments from the Middle East had already been disrupted since the weekend as tankers largely stopped transiting the Strait of Hormuz, a critical artery for global fuel flows at the entrance to the Persian Gulf. While Asian countries buy most of the LNG shipped from the Middle East, a disruption will increase competition for alternative supplies and push up prices worldwide. European gas inventories are unusually low and the region will need to import large volumes of LNG this summer to refill its tanks before next winter. While regional supplies haven’t been directly disrupted and traders are still assessing how long the conflict will last, benchmark prices rose to a one-year high.