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Markets Slip as Investors Bet on Extended U.S.–Iran Ceasefire

  Stocks Edge Lower as Investors Hope U.S.–Iran Ceasefire Will Hold Stocks drifted lower today as markets balanced cautious optimism over a potential extension of the U.S.–Iran ceasefire with persistent geopolitical and inflation concerns. Recent trading sessions have shown that even modest signs of diplomatic progress can meaningfully shift investor sentiment. Asian and U.S. markets rallied earlier this week on hopes that Washington and Tehran would continue negotiations, helping unwind some of the war-driven risk premiums that had pushed oil and volatility higher. Despite the pullback, investors remain hopeful that the ceasefire—currently set to expire soon—will be extended, giving negotiators more time to work toward a longer-term agreement. Reports indicate both sides are considering adding another two weeks to the pause, a move that has already helped push Brent crude below the recent peak of nearly US$120 per barrel. Lower oil prices have eased pressure on inflation expecta...
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Oil Shock Keeps Bank of Canada on Pause as Inflation Risks Rise

 

The Bank of Canada is widely expected to maintain its key interest rate as policymakers navigate a complex mix of rising oil prices and persistent inflation pressures. Economists note that the recent surge in global crude prices—driven by geopolitical conflict in the Middle East—has heightened inflation risks, reducing the likelihood of near‑term rate cuts. As a net oil exporter, Canada is somewhat insulated from the shock, but elevated energy costs still threaten to push consumer prices higher. 

Analysts suggest that while the central bank has kept its benchmark rate at 2.25% since late 2025, the current environment leaves little room for easing. The Iran‑related oil shock has already dampened expectations for rate cuts, with experts predicting the Bank will continue holding steady unless economic conditions deteriorate significantly. 

Despite the inflationary pressure, Canada’s economy is showing signs of strain, adding further complexity to the Bank’s decision-making. With unemployment ticking up and growth slowing, policymakers must balance the risk of fueling inflation against the need to support a cooling economy. For now, the consensus remains clear: stability over change.

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