Launch Pad

Back to the negotiating table. The recent pause in hostilities between the U.S. and Iran has helped negotiations, with Oman mediating talks aimed at restoring shipping through the Strait of Hormuz and potentially paving the way for broader discussions on Iran’s nuclear program and a lasting ceasefire. Progress in the negotiations has helped push oil prices lower, easing immediate concerns over energy supply disruptions and reducing inflationary pressures, although shipping activity through Hormuz and the Red Sea remains restrained. While markets have responded positively to the de-escalation, we should know by now how fragile these talks are, with geopolitical risks remaining high as any breakdown in talks or renewed regional attacks could disrupt global energy markets.

Germany’s economy likely posted modest growth in Q2 as resilient industrial activity and steady consumer spending helped offset the negative effects of higher energy prices stemming from the conflict in the Middle East. Strong foreign demand and exports supported the country’s manufacturing sector, while consumers continued spending despite reduced purchasing power from higher energy costs. Although government spending and investment are expected to support Germany’s longer-term recovery, the Bundesbank warned that temporary factors boosting growth are likely to fade and ongoing geopolitical tensions will continue to weigh on the outlook. Inflation is also expected to remain under upward pressure from higher energy costs, reinforcing expectations for only gradual economic growth in the coming quarters.

China’s economic slowdown is prompting officials to introduce additional targeted policy support, with the government focused on developing long-term, technology-driven growth. Experts argue that China is deliberately shifting resources toward strategic sectors such as semiconductors, AI, and advanced manufacturing, even as property, consumption and employment remain weak. This strategy is accelerating the development of an independent technology ecosystem that is becoming more and more competitive with the U.S., supported by policy incentives, growing commercialization, and lower-cost AI solutions. From an investment perspective, strategists see Chinese technology as a long-term diversification opportunity thanks to targeted policy support and relatively low valuations, despite recent weakness.

The Trump Trade is unravelling, with investments tied to reshoring, defense, housing, and traditional cyclical sectors falling about 16% since May after outperforming earlier in the year. The decline reflects concerns about the long-term impact of the Iran war and renewed tariff uncertainty, which have lifted energy prices, inflation expectations, interest rates, and the U.S. dollar while weakening the outlook for manufacturing and housing. Investors have instead favoured AI-related themes, highlighting how policy volatility and repeated supply shocks have made it difficult to identify clear market winners from the Trump administration’s agenda.

Can’t we all just get along? It hasn’t been the season they hoped for so far, but maybe the Blue Jays can help with some diplomatic relations with our neighbours south of the border. The Washington Nationals are holding a “Canada-U.S. Friendship Day” when they host the Toronto Blue Jays tonight at Nationals Park. The game includes a giveaway, a Nationals logo on a red maple leaf with a Montreal Expos logo on the side of the hat. The hat also comes in red, light blue and dark blue, representing an ode to the Expos’ colours. For those who are not big baseball fans, the Expos moved from Montreal to Washington, D.C. at the end of the 2004 season and became the Nationals. The Expos were the first Major League Baseball team north of the border, arriving in 1969, eight years before the Blue Jays played their first game in 1977. The Embassy of Canada in the U.S. said in a post on X that the evening serves as a celebration of America’s 250th anniversary through the two countries’ mutual love of baseball.

Gold is lower ahead of a potentially divisive decision on U.S. interest rates tomorrow, while a fragile pause in the Middle East conflict helped ease some inflation fears. Traders are positioning themselves for the Fed’s rate decision, with policymakers torn between June’s tamer-than-expected inflation reading and the more recent rise in oil prices that accompanied a flare-up in fighting between the U.S. and Iran. Gold is down by nearly -25% since the U.S.-Iran war began five months ago, with high energy prices stoking inflationary pressures. However, the metal has held near the key support level of $4,000 since late June, helped by a wave of dip-buying. Also helping support, bullion-backed ETFs have added holdings for five straight days, the longest streak of gains since May.