A more sanguine week on the markets with equities up, bond yields flat (US) or down (Canada). The US dollar strengthened, not because of Hormuz, but because the Fed is sounding a bit more hawkish. The higher greenback was reflected in lower gold, the Canuck Buck, and bitcoin. Oil traded below $80 for the first time since the start of the Iran war.
| Index | Close June 11th 2026 | Close June 18th 2026 |
| S&P500 | 7,389 | 7,499 |
| TSX60 | 34,658 | 34,969 |
| Canada 10 yr. Bond Yield | 3.41% | 3.37% |
| US 10 yr. Treasury Yield | 4.46% | 4.46% |
| USD/CAD | $1.39785 | $1.41333 |
| Brent Crude | $89.12 | $79.46 |
| Gold | $4,211 | $4,203 |
| Bitcoin | $63,247 | $62,787 |
Source: Trading Economics & Factset
The US Federal Reserve opted to hold interest rates steady. The unanimous vote was taken as a hawkish signal with markets now factoring in an 85% chance of a rate hike by year end. What was perhaps more note-worthy were the comments by Fed Chair Kevin Warsh about future Fed communications and processes. Expect less (if any) future guidance.
Overseas, the Bank of Japan raised its interest rates to the highest level in 31 years (1%). A huge change after enduring a multi-decade spiral of deflation. The Reserve Bank of Australia (RBA) and the Bank of England (BoE) both opted to hold rates steady for now. It should be noted that both central banks have a tightening bias going forward.
The big news of the week is that the US and Iran have called off hostilities for the time being. The MOU signed by both countries reopens the Strait of Hormuz and lifts the US blockade of Iranian ports. The MOU covers not just the US, Iran, and Hormuz but calls for an end to hostilities in Lebanon between Israel and Hezbollah. Neither of which were party to the deal. For now, ships are beginning to transit the strait. The US will also lift its sanctions on Iran, freeing up assets that have been frozen for over a decade. We still have 60 days of more detailed negotiations to get through before anything is “permanent”.
The G7 meeting was held in Evian-les-Bains France this week. There was probably more happening in the hallways and side-conversations than at the formal meetings. There were a few positive items to come out including more support for Ukraine, and Donald Trump saying he might soon re-instate sanctions on Russia. There was a sense of more unity in this conference than other recent ones.
Housing starts in the US fell by 15.4% in May. Most of the pain was in the multi-family sector will saw a drop of 40.2%. High interest rates, rising construction costs, and a labour shortage all contributed to the decline. It was a similar story in Canada just not so severe. Starts declines by 6% in May. Canada also has a glut of unsold condo’s particularly in the greater Toronto area.
Canada’s population declined in the 1st quarter of 2026. The decrease is the result of a lower birthrate and a decrease in immigration. The tightening up of work permits for temporary foreign workers and international student visas are largely responsible for the immigration decline.
As I finish off this week’s missive, Canada has just won its first game in a men’s football (soccer) World Cup beating Qatar 6-0. This after a 1-1 tie against Bosnia-Herzogovina last Friday. If Canada ties or beats Switzerland on Wednesday, they will advance to the next stage of the tournament. Allez les Rouge!!
Since it is the World Cup, we’ll close off with this from the 1998 series by Ricky Martin….enjoy
Russ Lazaruk, RIAC, CIWM, CIM, FCSI
Managing Director & Portfolio Manager
