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Canada’s Growth Model Faces a Turning Point For decades, Canada’s economy has been supported by two powerful pillars: housing and natural resources. Residential real estate has fueled household wealth and consumer spending, while industries such as oil, natural gas, mining, and forestry have remained major contributors to exports and economic growth. While these sectors continue…
Artificial intelligence has become the dominant theme in global markets, driving significant gains across technology stocks. Investors have poured billions into companies involved in semiconductors, cloud computing, data centres, and AI software, betting that the technology will reshape the global economy. The enthusiasm is supported by strong investment trends, with businesses rapidly increasing spending on AI infrastructure and development.
The rise in U.S. long-term bond yields above the 5% threshold marks a significant shift in the global financial landscape. For much of the past decade, markets operated in an environment defined by low interest rates and abundant liquidity. That regime supported higher equity valuations, cheap capital, and strong risk appetite. The recent move higher in yields suggests that this backdrop may be changing more structurally than previously assumed.
Global financial markets are entering a phase defined by an increasingly complex interaction between commodity price dynamics and central bank policy. While monetary authorities continue to focus on anchoring inflation through restrictive policy, rising prices in energy and key raw materials are reintroducing inflationary pressure into the system.
For much of the past year, financial markets remained focused on one dominant expectation: inflation would gradually decline, central banks would begin cutting interest rates, and global growth would stabilize. However, recent developments suggest that this outlook may be too optimistic. Rising energy prices, persistent inflationary pressures, and weakening growth indicators are reviving concerns about stagflation—a scenario markets have long feared but largely ignored.
For much of the past decade, Environmental, Social, and Governance (ESG) principles shaped the direction of global investment and energy policy. Governments promoted aggressive decarbonization targets, investors shifted capital toward renewable energy, and corporations aligned themselves with sustainability goals.
At the start of 2026, financial markets broadly anticipated that major central banks—particularly the U.S. Federal Reserve and the European Central Bank—would begin easing monetary policy as inflation moderated and growth momentum slowed.
After a period of moderating price pressures, global inflation risks are once again coming into focus. The recent rise in energy prices—particularly oil and natural gas—raises an important question: Is the world facing a second wave of inflation?
The re-emergence of oil prices above $100 per barrel represents a critical inflection point for the global macro environment. Unlike prior commodity cycles, the current surge is occurring against a backdrop of persistent inflation, restrictive monetary policy, and heightened geopolitical risk.
For decades, the inverse relationship between the U.S. dollar and commodity prices has been a foundational principle in macro investing.