Launch Pad

Coming in hot. Investors are assessing the latest U.S. wholesale inflation data which came in stronger than expected in February. The producer price index rose 0.7% month-over-month and 3.4% annually, both above forecasts, while core PPI also exceeded estimates at 0.5% on the month and 3.9% year-over-year. The data signals growing cost pressures across goods and services, even as earlier consumer inflation readings had shown some moderation. The figures also largely predate the recent Iran-related oil shock, suggesting inflation risks could further intensify as higher energy prices feed through the economy and begin to weigh on consumer sentiment. 

The Bank of Canada is expected to hold its policy rate at 2.25% for a third straight meeting today as policymakers balance rising inflation risks from higher oil prices against weakening domestic economic data. Governor Tiff Macklem and his team are facing increased uncertainty due to the Middle East conflict, which has pushed oil prices far above earlier assumptions and raised concerns about renewed inflation pressures. At the same time, Canada’s economy is showing signs of slowing, including job losses, slowing growth, weak housing activity, and trade-related headwinds from U.S. tariffs. With no updated forecasts this meeting, the central bank is expected to remain cautious and avoid signaling a clear policy direction, while slightly leaning more hawkish due to energy-driven inflation risks. Most economists expect rates to remain on hold for the rest of the year, as officials wait for more clarity on how the oil shock and overall economic conditions evolve. The Canadian dollar is expected to face downward pressure following the BoC decision, with currency traders expected to view the central bank’s cautious stance negatively. Despite Canada’s status as an oil exporter, the currency is struggling to benefit from higher crude prices due to the strength of the U.S. dollar and a widening short-term interest rate gap in favour of the U.S., leaving the loonie vulnerable in the near term. 

No friends. Trump criticized allies, particularly NATO members, for refusing to join the Iran war effort, calling their stance a mistake while simultaneously insisting the U.S. does not need their support. The dispute highlights growing tensions between the White House and its partners as many countries remain reluctant to be drawn into the conflict. While not specifically called out, Canada said it will not participate in offensive military operations against Iran, emphasizing that the country has no intention of joining such actions. Instead, Canada is prioritizing de-escalation, protecting civilian lives, and maintaining stability, while Mark Carney has also called for restraint. Although Canada is wary of being drawn deeper into the conflict, it has not ruled out limited involvement in efforts to secure shipping through the Strait of Hormuz if a coordinated international response emerges. Meanwhile, the war continues to disrupt global energy markets, with the Strait of Hormuz largely blocked, oil prices hovering around $100, and attacks on key infrastructure intensifying. 

The Iran war has prompted investors to reassess risks across a wide range of industries, turning what began as an energy shock into a broader market repricing. Global equities have fallen about –3.7% since the conflict began, with Asia hit hardest, while expectations for Fed rate cuts have been pushed back. Beyond the obvious losers such as airlines and shipping firms, supply disruptions and higher energy costs are affecting sectors including semiconductors, food delivery, automakers, retailers, fertilizers, chemicals and homebuilders. Chipmakers face potential shortages and rising data-center energy costs, retailers and apparel firms are becoming pressured by higher transport costs and weaker consumer spending, and automakers risk softer demand for fuel-intensive vehicles. At the same time, some sectors are benefiting from the shift, including energy, defense, fertilizer producers, certain chemical companies and alternative energy firms, highlighting how the war’s economic impacts are spreading well beyond oil markets. 

New kid on the block. An anonymous AI model called Hunter Alpha has some speculating that it could be an early test version of a next-generation system from DeepSeek. Although no official confirmation has been given, the model describes itself as a large Chinese-trained system with a knowledge cutoff of May 2025, similar to DeepSeek’s existing models. With an estimated one trillion parameters and a massive one-million-token context window, it rivals cutting-edge AI systems while being offered for free. Some developers point to similarities in reasoning style and architecture as evidence of a DeepSeek connection, while others argue differences suggest it may not be their upcoming model. Anonymous launches like this are common in the AI industry, allowing companies to test performance and gather feedback without bias, and the model has already seen rapid adoption across developer tools and AI agent platforms, so it’s likely we’ll know who’s behind it soon enough. 

The mysterious street artist Banksy has been identified as Robin Gunningham, a 51-year-old from Bristol, following a detailed Reuters investigation. According to the report, he changed his name to David Jones (the most common name in the UK at the time) in 2008 to better conceal his identity, effectively hiding in plain sight while continuing his work. The investigation cited sources including travel records, past reports, a New York police arrest document, and connections to individuals such as photographer Peter Dean Rickards, while also dismissing long-standing speculation that Banksy was Robert Del Naja of Massive Attack. Banksy’s lawyer pushed back on aspects of the report, emphasizing that anonymity is essential to protect the artist from threats and to preserve freedom of expression, particularly given the political and social nature of his work. Despite the denial, Reuters defended the findings, arguing there is strong public interest in revealing the identity of a figure whose works has had such an impact on the culture. 

Gold prices are down to the lowest in a month, as investors weighed the Federal Reserve’s path for interest-rate cuts against inflationary risks from the war in the Middle East. Bullion, which traded in a narrow range in recent days, has now slipped below $5,000. The energy-supply crunch and higher crude prices have raised concerns over inflation and reduced the prospect for near-term rate cuts by the Fed and other central banks. While gold’s upward momentum has stalled in recent weeks, the metal has still gained about 15% this year, aided by geopolitical risks and as threats to the Fed’s independence support demand. Concerns about stagflation could also be supportive for bullion in the longer term as investors look for alternative stores of value.