Daily roundup of research and analysis from The Globe and Mail\u2019s market strategist Scott Barlow<\/p>\n
Market underpricing rate cut risk<\/p>\n
BofA Securities analyst Katie Craig continues to expect two rate cuts for the Bank of Canada this year,<\/p>\n
\u201cCanadian economic data has been generally weak of late, supportive of our economist call for 50bp in BoC cuts in \u201826. While the market continues to price in a BoC largely on hold this year, the chances of a BoC cut are rising. Trade uncertainty and tariffs from the US have structurally weakened the CA economy. The recent cancellation of IEEPA tariffs is likely a positive development for Canada, which had a blanket tariff of 35 per cent. However, USMCA-compliant goods were exempt from those tariffs, leaving the effective tariff rate much lower. It is unclear if the 15-per-cent tariffs announced post IEEPA-ruling under Section 122 will include USMCA goods. Any preferential treatment through the USMCA would provide a relative benefit for CAD \u2026 Our forecasts project CAD rates to fall below forwards, especially for front-end rates. We believe the market is underpricing risks of further BoC cuts and overpricing risks of the BoC lifting rates in mid 2026\u2033<\/p>\n
Experts expect war in Iran<\/p>\n
Scotiabank held their annual global energy conference Wednesday with keynote speakers Janice Gross Stein, global affairs professor at the University of Toronto and Rudyard Griffiths Sr., also from the Munk School of Global Affairs at U of T. <\/p>\n
Here are the main takeaways from the discussion,<\/p>\n
\u201cIran. They believe there will be war. The question is how long. American credibility is on the line and Trump needs to project force. Predicting the length of the war will be difficult, and will depend on the US\u2019s execution. There will likely be significant ongoing impact to energy infrastructure. Iranian oil exports will go to zero, possibly for an extended period of time due to infrastructure and international embargo. Regime change is uncertain. There are entrenched interests to keep the regime going. There is enormous opposition, but the opposition is disunited. Oil exports don\u2019t even have to go to zero to produce uncertainty premium to pressure oil prices. They expect China and Russia will sit this one out \u2026 Canada and US. Believes this is an episodic moment, not a rupture. The Administration\u2019s response suggests the rule of law is well entrenched in the U.S.. The rhetoric that Canada and US relations are ruptured is a political calculation. Canada\u2019s future ultimately lies in North America.<\/p>\n
\u201cIn the near term, the trade agreement will be important. There could be some disruption if USMCA doesn\u2019t get renewed.<\/p>\n
\u201cThe idea of a new Western Gateway is less likely due to political headaches. In terms of long-term planning, Canada needs to diversify energy exports. There is finally recognition that Canada needs to build infrastructure.<\/p>\n
\u201cRegarding Canada and China relations, believes it\u2019s a limited move. American car companies are concerned about Chinese EV penetration in the Canadian market\u201d<\/p>\n
More upside for gold<\/p>\n
RBC Capital Markets commodities strategist Christopher Louney believes gold prices still have a lot of upside left,<\/p>\n
\u201cTariff uncertainty after the Supreme Court\u2019s ruling and Middle East tension given US-Iran negotiations and the buildup of US forces in the region have underpinned the uncertainty that has supported gold of late and left it trading around our Q4 high scenario. This reinforces upside risk to even our high scenario prices, as the path of least resistance still seems to the upside.<\/p>\n
\u201cWe have previously highlighted $7100\/oz as a possibility if gold is able to scale similar ground to last year, which we no longer can write off as a possibility. After over 800t of ETP inflows last year, we now forecast around 590t of inflows this year, surpassed by 750t of official sector demand (below last year\u2019s total above 800t, but still strong). While both of these represent strong ongoing interest in gold, the absolute decline y\/y is largely due to higher prices, which, as we mentioned, could skew even higher. We suspect that investors are looking for a pullback to layer in even more\u201d<\/p>\n
Bluesky post of the day<\/p>\n
. #nvidia #ai #markets #economy @financialtimes.com<\/p>\n
[image or embed]<\/a><\/p>\n \u2014 Mohamed A. El-Erian (@elerianm.bsky.social<\/a>) February 26, 2026 at 7:11 AM<\/a>Diversion<\/p>\n