Launch Pad

New playbook. Trump has revised his tariff strategy following the court’s decision to strike down his original Liberation Day tariffs. Rather than relying on broad emergency tariffs, the administration is rebuilding its trade barriers using Section 301 investigations targeting issues such as forced labour and industrial overcapacity. Countries like the Philippines, South Africa and several smaller emerging markets stand to benefit from lower tariff rates than they faced previously, potentially improving their competitiveness and attracting manufacturing investment. Singapore is looking to become one of the biggest losers, however, while the outlook for major trading partners including Canada, Mexico, the European Union and China remains uncertain as negotiations continue. For Canada, lower baseline tariffs are offset by ongoing sector-specific duties on metals and uncertainty surrounding CUSMA renegotiations, while China will see a lower effective tariff rate than initially threatened, although they will face another critical round of trade negotiations later this year. 

U.S.-listed ETFs have attracted nearly $1 trillion of inflows so far this year, putting 2026 on pace to shatter last year’s record of $1.5 trillion. What’s notable is how this comes despite persistent inflation, geopolitical tensions, and market volatility. The rise reflects strong investor preference for the ETF structure, led by low-cost broad-market equity funds, with equity ETFs accounting for more than $660 billion of inflows. New products have also fueled demand, with more than 600 new ETFs launched this year, including specialized AI-related funds. The trend suggests just how much investors view ETFs as the preferred vehicle for gaining both broad and targeted market exposure. 

The yen is continuing to slide, once again trading near its weakest level in almost 40 years and  increasing the likelihood of Japanese government intervention. Although traders are positioning for intervention through higher options volatility, many remain skeptical that official action alone can produce a meaningful recovery due to fundamental drivers like wide interest rate differentials between the U.S. and Japan which still strongly favours the dollar. A more hawkish Fede, elevated oil prices, and expectations that the BOJ will tighten policy only gradually continue to weigh on the yen, leading some strategists to believe the currency could weaken toward ¥162 per dollar before authorities step in. Even if intervention does happen, many expect any subsequent yen rally to only be temporary unless Japan’s monetary policy becomes more aggressive or U.S. interest rates begin to fall. 

EM stocks are getting more attention these days, as corporate earnings exceed expectations for the first time since 2022, helping EM indexes rally nearly 30% YTD. While Asian tech companies (especially AI beneficiaries like semiconductor firms in South Korea and Taiwan) have been the primary drivers, earnings are also improving in sectors like energy, financials, and infrastructure across emerging markets. Strategists have argued that attractive valuations relative to U.S. peers, a weaker dollar, rising AI and infrastructure investment, and China’s gradual economic recovery could attract additional capital into EM equities. Still, the rally remains concentrated in technology, with many consumer and defensive sectors still lagging, suggesting broader earnings participation will be needed for the bull market to become more sustainable. 

Eyes on the Arctic. Canada has signed a $1.8 billion agreement to acquire Australia’s Over-the-Horizon Radar system (OTHR), strengthening its ability to detect aircraft and vessels thousands of kilometres away and improve surveillance across the Arctic and northern territories. The deal advances Ottawa’s efforts to modernize continental defense and reinforce Arctic sovereignty as military, commercial, and geopolitical activity in the region continues to increase. The radar system will provide long-range early warning and surveillance capabilities, complementing other recent defense initiatives, including commitments to modernize NORAD and expand Arctic infrastructure. The agreement also highlights growing strategic cooperation between Canada and Australia, two key members of the Five Eyes intelligence alliance, as both countries respond to a more challenging global security landscape. For Canada, the investment represents another step toward improving awareness and security across a region that is becoming more important both economically and geopolitically. 

Even Jamie says so. One of the unexpected side effects of the World Cup has been a temporary reprieve from in-office mandates. Faced with the possibility of severe traffic congestion, some employers in host cities across North America, including New York, LA, Toronto, Vancouver, and Mexico City, are temporarily relaxing in-office attendance requirements and encouraging employees to work from home on match days. Even JPMorgan CEO Jamie Dimon, one of Wall Street’s most vocal critics of remote work, has given employees additional flexibility. While the World Cup may not settle the work-from-home debate, we can all agree that sitting in traffic amid road closures is not a productive use of anyone’s day. With congestion a common complaint in both Toronto and Vancouver, the World Cup may provide a reminder that a little imagination and flexibility can sometimes achieve what infrastructure alone cannot. 


Diversion: Help!
 

Aluminum is down by more than -4%, along with other industrials metals posting sharp declines, after a bearish turn for equities weighed on sentiment in commodities markets. Metals have been  correlated to shifts in equities markets in recent months as investors bet on growing demand from AI and power infrastructure. Aluminum is under additional strain as the U.S. and Iran make progress on peace talks, spurring bets of a recovery in Middle Eastern supply. Aluminum is still up over 8% this year, but this month’s sharp declines have dragged prices back to levels just prior to the start of the war in late February.